ARGUMENTS  AS  TO  THE  TRUE  VALUE  OF 
THE  GENERAL  PROPERTY  IN  WISCONSIN 


January,  1904 


, v.'  ''  v , -,4f 

; V ‘ ,v  ^ . *** 


FRANK  P.  CRANDON 
THOMAS  H.  BROWN 
ARTHUR  S.  DUDLEY 
W.  W.  BALWIN 
THOMAS  A.  POLLEYS 


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University 


Madison,  Wisconsin,  January  26,  1904. 

HEARING  OF  THE  REPRESENTATIVES  OF  THE  VARIOUS  RAIL- 
ROAD COMPANIES  BEFORE  THE  STATE  BOARD  OF  ASSESS- 
MENT, IN  THE  MATTER  OF  THE  TRUE  VALUE  OF  THE  GEN- 
ERAL PROPERTY  OF  THE  STATE. 

Present : 

N.  S.  Gilson,  George  Curtis,  Jr.,  and  Nils  P.  Haugen, 
members  of  the  Board;  Prof.  Wm.  D.  Taylor,  Engineer  of 
the  Board;  John  Marsden,  Jr.,  Engineer  and  Inspector  of 
the  Board. 

Erank  P.  Crandon,  Tax  Commissioner  Chicago  & North- 
western By. 

A.  S.  Dudley,  Tax  Commissioner  Chicago,  Milwaukee  & 
St.  Paul  By. 

Thomas  H.  Gill,  Tax  Commissioner  Wisconsin  Central 
Bailway. 

E.  P.  Hickey,  Tax  Commissioner  Northern  Pacific  By. 

Charles  Hayden,  Tax  Commissioner  Eastern  By.  of  Min- 
A nesota. 

George  G.  Tunell,  Secretary  to  the  President  Chicago  & 
Northwestern  By. 

George  B.  Peck,  General  Counsel  Chicago,  Milwaukee  & 
St.  Paul  By. 

T.  A.  Polleys,  Tax  Commissioner  Chicago,  St.  Paul,  Min- 
neapolis & Omaha  By. 

Chairman  Gilson : Gentlemen,  we  have  met  to-day  for 

the  purpose  of  giving  the  representatives  of  the  railroad 
companies  in  this  state  who  are  to  be  assessed  under  the 


I 09277 


2 


ad  valorem  law  the  opportunity  to  be  heard  and  to  present 
their  views  in  regard  to  the  value  of  the  general  property 
of  the  state,  which  is  to  be  one  element  in  arriving  at  the 
average  rate  of  taxation.  Are  you  ready  to  proceed,  gentle- 
men, with  your  discussion  of  these  questions  ? 

Mr.  Frank  P.  Crandon:  Since  the  meeting  that  was  held 

here  with  the  Commission  in  September,  the  committee  that 
was  then  appointed  by  the  various  railroad  companies  to 
take  up  this  question  and  examine  it  has  been  very  diligently 
at  work.  We  have  made  very  extensive  investigations,  and 
have  ready  for  your  consideration  a very  large  amount  of 
statistical  information  which  we  think  will  be  of  great  in- 
terest. Our  work  has  been  carried  on  jointly ; the  three  mem- 
bers of  the  committee  being  Mr.  Baldwin,  Mr.  Dudley  and 
myself.  We  greatly  appreciate  the  courtesy  of  the  Commis- 
sion in  coming  together  to-day  to  hear  the  result  of  our 
labors.  Since  I started  from  home  I have  learned  that  Mr. 
Baldwin,  who  has  to  do  very  largely  with  an  important  part 
of  our  investigation,  starting  from  Burlington,  has  been  de- 
layed four  hours ; and  since  I got  here  I have  had  a 
telephonic  conversation  with  him.  He  asks  if  it  be  possible, 
if  we  are  not  trenching  too  far  upon  the  courtesy  of  the  Tax 
Commission  that  an  adjournment  may  be  taken  until  he  ar- 
rives. He  suggested  such  adjournment  till  8 o’clock  to-night, 
as  he  expected  to  take  a train  that  is  due  here  then.  In  the 
little  conversation  I have  had  with  some  of  the  gentlemen 
present  it  was  a question  whether  we  ought  not  to  adjourn, 
if  the  Commission  is  so  disposed,  until  to-morrow  morning, 
rather  than  to  8 o’clock  to-night.  If  Mr.  Blaldwin  comes, 
as  he  will  if  the  train  gets  here,  our  committee  is  ready  to 
proceed  at  any  time.  If  the  Commission  can  grant  us  the 
favor  asked  for,  we  shall  be  greatly  obliged. 


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Mr.  Georg©  R.  Peck : Mr.  Chairman. — The  request  of  Mr. 
Baldwin,  it  seems  to  me,  is  a very  reasonable  one.  Probably 
he  feels  worse  about  it  than  any  of  the  rest  of  us,  because  in 
addition  to  missing  the  appointment  he  is  probably  plugging 
along  on  some  slow  train  towards  Madison.  I doubt  very  much 
if  you  can  count  on  the  train  which  is  due  here  at  8 o’clock 
being  here  at  that  time.  Hardly  any  train  is  now  moving  on 
time.  I was  nearly  two  hours  late  this  morning.  But  how 
would  this  plan  do,  if  the  Commission  grant  a postponement, 
to  fix  8 o’clock  to-night.  Is  the  train  due  promptly  at  8 ? 

Mr.  Thomas  H.  Gill:  Eight,  at  the  west  depot. 

Mr.  Peck:  Then  it  would  be  half  past  before  you  could 

get.  started  anyway,  that  is,  before  we  could  get  him  up  from 
the  train.  I would  like  very  much  myself  to  have  something 
done  to-night,  so  as  to  be  more  certain  to  finish  to-morrow. 
I hoped  that  we  could  do  some  of  the  work  to-night,  if  the 
Commission  would  consent  to  hold  an  evening  session. 

Chairman  Gilson : Well,  gentlemen,  I think  that  it  would 
be  better  to  adjourn  until  to-morrow  morning,  rather  than  to 
attempt  to  hold  a session  this  evening.  The  discussion  of  the 
questions  that  are  involved  in  this  inquiry  are  too  important 
to  be  taken  up  in  an  evening  session.  Mr.  Baldwin  probably 
couldn’t  get  here  before  9 o’clock,  and  that  hour  would  be 
very  inconvenient,  I think,  for  everybody.  If  it  is  agree- 
able to  all  the  gentlemen  who  appear  here  acting  with  you, 
we  will  adjourn  until  9 o’clock,  or  10  o’clock  to-morrow,  as 
most  convenient, 

Mr.  Peck:  I would  suggest  9 o’clock,  Mr.  Chairman,  be- 

cause time  is  important  now. 

Chairman  Gilson:  We  will  then  adjourn  the  hearing  un- 
til 9 o’clock  to-morrow  morning;. 

# O 


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Madison  January  27,  1904. 

Hearing  Resumed. 

Parties  present  as  before  noted,  and  in  addition,  Mr. 
L.  W.  Bowers,  General  Counsel  of  the  C.  & 1ST.  W.  Ry.  Co., 
and  Mr.  W.  W.  Baldwin,  Tax  Commissioner  of  the  C.,  B.  & 
Q.  Ry.  Co. 

Chairman  Gilson:  Gentlemen,  if  you  are  ready  to  pro- 

ceed this  morning,  we  shall  be  pleased  to  hear  what  you 
have  to  offer. 

STATEMENT  OF  FRANK  P.  CRANDON  ON  THE  VALUE  OF  THE 

GENERAL  PROPERTY  IN  WISCONSIN  SUBJECT  TO  TAXA- 
TION. 

Mr.  Frank  P.  Crandon:  Mr.  Chaiman,  as  we  are  all 

aware  the  law  enacted  by  the  last  legislature  of  Wisconsin 
provides  that  the  rate  of  taxation  which  shall  be  applied  to 
the  assessed  value  of  the  Wisconsin  railroads,  is  to  be  de- 
termined by  ascertaining  the  average  rate  of  taxation  which 
is  borne  by  what  the  law  designates  “The  general  property 
of  the  state/' 

When  we  take  note  of  the  stringent  provisions  of  the  stat- 
ute for  ascertaining  to  the  last  possible  fraction  of  a dollar, 
the  value  of  the  railroad  property,  it  is  seen  to  be  fundament- 
ally important  that  the  value  of  the  said  general  property, 
which  is  the  basis  to  be  used  for  establishing  the  taxing  rate, 
should  be  fully  and  equitably  ascertained. 

The  representatives  of  the  Wisconsin  railways  realizing 
the  importance  of  this  proposition,  last  September  appointed 
a committee  to  take  up  that  matter  and  to  find  out  if  they 
could,  what  is  the  value  of  the  general  property.  That  com- 
mittee consisted  of  Mr.  W.  W.  Baldwin  of  the  C.,  B.  & Q. 


5 


Ry.  Co.,  Mr.  A.  S.  Dudley  of  the  C.,  M.  & St.  P.  Ry.  Co., 
and  myself.  Before  entering  upon  our  work  we  had  a pleas- 
ant conference  with  yourselves  as  to  the  best  methods  of  car- 
rying on  our  inquiries,  and  wTe  desire  at  this  time  to  express 
our  appreciation  of  the  courtesy,  kindness  and  helpfulness, 
of  which  we  were  then  the  recipients. 

We  have  given  much  time  and  labor  and  thought  to  this 
subject.  Our  investigations  have  been  carried  on  at  a con- 
siderable expense,  and  w©  now  return  to  you  to  make  what, 
may  be  regarded  as,  in  some  sort,  a report  of  our  acts  and  do- 
ings and  conclusions. 

The  task  to  which  we  were  assigned  is  both  more  difficult 
and  more  comprehensive  than  we  at  first  realized.  Though 
we  have  been  diligent  and  have  used  to  the  best  advantage 
the  time  at  our  command,  the  work  is  still  incomplete  and 
after  we  have  told  you  about  it,  the  question  will  arise 
whether  we  will  discontinue  our  investigations  or  prosecute 
them  further.  This  question  of  course  the  several  companies 
which  are  interested  in  the  results  and  the  preferences  of 
your  Commission,  will  decide. 

In  order  that  we  might  not  consume  your  time  by  unneces- 
sary repetitions  and  also  that  our  report  might  assume  a 
more  systematic  form  than  could  otherwise  be  given  to 
it,  we  have  divided  the  work  of  its  presentation  as  follows : 

First.  To  myself  was  assigned  the  discussion  of  the  gen- 
eral propositions  which  we  have  considered  and  the  methods 
which  were  adopted  in  the  prosecution  of  our  inquiries. 

Second.  Mr.  Dudley  will  present  the  statistical  facts 
which  we  have  gathered  and  formulated,  and  with  which  he 
is  exceedingly  familiar. 

Third.  Mr.  Baldwin  will  take  up  and  discuss  the  ques- 
tions connected  with  the  value  and  assessment  of  Wisconsin 
personal  property — which  is  a prolific  and  interesting  field. 


6 


I make  this  statement  now  so  that  you  may  kno^  what 
are  the  limitations  which  we  have  severally  placed  upon 
ourselves,  and  also  that  you  may  know  what  to  expect  as 
the  discussion  proceeds. 

When  we  met  in  September  our  work  had  not  been  begun. 
The  problem  which  we  were  to  try  to  solve  was  a difficult 
one.  Accessible  data  were  scanty,  incomplete  and  unrelia- 
ble. The  returns  of  the  local  assessors  throughout  the  state, 
are  made  up  on  such  different  theories,  that  even  in  their 
best  estate,  they  afford  no  accurate  information,  and  are 
never  more  than  a suggestion  as  to  real  value  even  in  the 
ease  of  real  property,  and  are  absolutely  valueless  as  a basis 
for  determining  either  the  amount  or  the  worth  of  the  per- 
sonal property  of  the  state.  We  were  soon  convinced  that 
if  our  work  was  to  be  helpful  to  the  Board  of  Assessment, 
or  if  it  should  afford  any  substantial  support  for  such  con- 
clusions as  might  eventually  be  reached  by  ourselves,  it  must 
partake  largely  of  the  character  of  an  original  investigation. 

At  that  time  wTe  considered  very  fully,  and  were  very 
greatly  impressed  by  the  method  that  is  so  elaborately  set 
forth  in  the  report  of  the  Tax  Commission  for  1901,  for  as- 
certaining the  value  of  Wisconsin  realty.  Without  taking 
time  now  to  re-state  that  method  in  detail,  it  may  be  suf- 
ficient for  the  information  of  those  who  are  unfamiliar  with 
it  to  say,  that  it  is  based  upon  the  reported  sales  of  real  prop- 
erty that  have  been  made  throughout  the  state,  comparing 
the  consideration  that  is  named  in  those  conveyances  with  the 
actual  assessment  placed  upon  the  property  at  the  assessment 
period  nearest  to  the  date  of  making  the  sale,  and  after  as- 
certaining the  ratio  which  exists  between  the  selling  value 
and  the  assessment  value  of  the  property  described,  to  apply 
the  ratio  thus  obtained  to  the  assessed  value  in  an  assess- 
ment district,  and  thus  obtain  what  is  assumed  to  be  the 


7 


real  value  of  the  property  in  that  particular  district,  and  so 
on  throughout  the  state. 

At  the  September  meeting,  Mr.  T.  A.  Polleys  of  the  Chi- 
cago, St,  Paul,  Minneapolis  and  Omaha  Kailway  Company, 
was  present.  He  had  on  his  own  account,  made  some  investi- 
gations as  to  the  results  which  would  follow  this  method 
when  applied  to  localities  with  which  he  was  familiar.  His 
inquiries  had  not  extended  beyond  those*  counties  which  are 
traversed  at  least  in  part  by  the  C.,  St,  P.  M.  & O.  railroad 
and  were  limited  to  the  transactions  of  a single  year.  The 
results  which  he  obtained  were  so  different*  from  those  ob- 
tained by  the  Tax  Commission  that*  he  was  of  the  opinion 
that  some  very  serious  errors  had  crept  into’  the*  Commis- 
sion’s computations. 

The  Tax  Commission  was  not  less  anxious  than  we  were 
ourselves  that  the  accuracy  of  these  computations  should  be 
tested,  and  that  if  they  were  in  any  respect  erroneous,  the 
proper  correction  should  be  made.  With  the  full  concur- 
rence of  the  Commission  and  of  our  Committee,  Mr.  Pol- 
leys agreed  to  undertake  an  examination  to  determine  the 
accuracy  of  the  computations  referred  to  and  to  test  their 
value.  He  did  that.  He  spent  a large  amount  of  time  and 
a great  deal  of  work  in  revising  those  computations  and 
the  result  was,  that  when  his  examinations  covered  the  same 
periods  which  had  been  used  by  the  Tax  Commission,  and 
the*  method  was  applied  according  to  the  Commission’s  plan, 
the  results  were  substantially  identical.  Mr.  Polleys’  im- 
pressions as  to  the  inaccuracy  of  these  computations  had 
arisen  from  the  fact  that  he  had  confined  his  original  in- 
vestigations to  the  operations  of  a single  year,  while  the 
results  set  forth  by  the  Commission  had  covered  a period 
of  five  years.  The  results  obtained  when  the  data  for  a 


8 


single  year  were  taken,  were  so  at  variance  with  what  they 
were  when  taken  for  a period  of  five  years,  that  he  could  only 
account  for  that  difference  on  the  theory  that  serious  errors 
had  crept  into  the  computations.  I think  he  was  subse- 
quently convinced  that  that  was  not  true.  The  fact,  how- 
ever, existed  at  the  end  of  his  investigation  as  he  had  found 
it  in  the  first  instance,  that  when  the  investigation  was  con- 
fined to  the  period  of  a single  year,  a very  different  result 
would  be  produced  from  that  which  appeared  as  the  conclu- 
sions of  the  Tax  Commission  in  the  report  referred  to. 

But  when  it  was  applied  to  the  period  of  five  years  the 
report  was  substantially  correct.  That  is  right,  isn’t  it,  Mr. 
Polleys  ? 

Mr.  Polleys:  Yes;  substantially  the  same,  for  the  same 

period,  by  the  same  method. 

Mr.  Crandon:  Our  Committee  was  at  first  considerably 

impressed  by  the  reasoning  contained  in  the  report  of  the 
Tax  Commission,  and  thought  that  perhaps  the  method  they 
had  adopted  would  provide  for  a very  considerable  part  of 
the  work  which  we  had  been  expected  to  do,  and  we  were  not 
at  the  time  of  the  September  conference  prepared  to  suggest 
any  different  or  better  method  for  ascertaining  the  actual 
value  of  the  real  estate  in  Wisconsin,  outside  of  that  which 
is  devoted  to  railroad  purposes. 

Since  that  time,  however,  we  have  given  the  whole  sub- 
ject the  most  careful  consideration  and  have  made  a most 
comprehensive  examination  into  all  the  details  connected 
with  the  reported  real  estate  sales  in  several  counties  of  the 
state  and  we  are  convinced  that  the  method  suggested  by 
the  Tax  Commission  is  absolutely  unreliable.  Theoretically 
it  is  plausible  and  fair.  If  the  reported  conveyances  ade- 
quately set  forth  all  of  the  features  of  the  transactions  to 


9 


which  they  refer — if  it  were  possible  to  know  that  only  the 
reports  of  bona  fide  transactions  entered  into  the  computa- 
tion, and  if  we  could  be  sure  that  the  property  which  had 
been  sold  and  the  property  which  had  been  assessed,  were  in 
all  cases  identical,  the  theory  in  question  might  afford  some 
substantial  basis  for  an  estimate  of  real  values.  But  as  a 
matter  of  fact  in  a majority  of  instances,  these  conditions  do 
not  exist.  In  more  than  half  of  the  conveyances  reported, 
one  or  more  and  in  some  cases  all  of  these  essential  consider- 
ations are  wanting.  In  many  of  the  instances  none  of  the 
data  is  accurately  stated.  As  we  proceeded  with  our  work, 
the  unreliability  of  the  reported  conveyances,  as  an  indica- 
tion of  actual  value  became  more  and  more  manifest,  until 
finally  our  committee  was  convinced  of  the  entire  untrust- 
worthiness of  any  conclusions  which  are  based  on  the  theory 
that  I have  just  been  considering. 

The  statistics  supporting  this  conclusion  will  be  presented 
by  Mr.  Dudley,  and  it  may  be  sufficient  to  say  now  that  the 
use  of  the  reported  conveyances  was  necessarily  discarded. 

I suppose  that  the  plan  of  extending  this  examination 
as  to  real  estate  values  over  a period  of  five  years,  largely 
resulted  from  the  sincere  purpose  of  the  Tax  Commission 
to  be  exactly  fair  and  to  do  justice  to  all  the  interests  which 
would  be  affected  by  whatever  conclusions  as  to  values,  they 
should  eventually  reach. 

I do  not  know  what  their  views  now  may  be1,  but  in  their 
last  two  reports  they  dealt  largely  with  the  theory  of  deter- 
mining the  value  of  railroads  by  what  is  known  as  the  “Stock 
and  Bond  method,”  and  in  order  that  they  might  obtain 
reasonably  correct  and  satisfactory  quotations  of  the  value 
of  those  securities,  they  extended  their  examinations  as  to 
the  sales  of  railroad  stocks  and  bonds  through  a period  of 


10 


five  and  of  seven  years,  and  from  the  different  values 
which  had  prevailed  at  different  dates  throughout  such  pe- 
riods they  found  an  average  price  at  which  they  thought  it 
was  fair  to  estimate  the  value  of  said  securities.  Then  wbh 
the  purpose  to  be  just  as  fair  as  possible,  they  seem  to  have 
said : “Now,  let  us  extend  our  examination  as  to  the  value 

of  ieal  estate  so  as  to  cover  the  same  period.  This  plan  will 
put  all  properties  on  an  equal  basis  and  no  one  will  he  harmed 
or  can  complain.” 

Just  here  we  think  they  were  in  error. 

The  Tax  Commisison  already  knows  that  the  railway  com- 
panies that  are  represented  by  this  Committee  do  not  believe 
or  admit  that  the  selling  price  of  the  stocks  and  bonds  of  any 
such  company,  even  remotely  suggests  the  value  of  the  prop- 
erty owned  by  the  company  which  issues  the  securities.  It 
seems,  however,  that  if  the  stock  and  bond  method  is  to  be 
observed,  it  will  be  fair  to  find  an  average  selling  price  for 
those  securities  throughout  a period  which  is  long  enough  to 
correct  quotations  which  are  due  to  temporary  causes  and  ab- 
normal fluctuations.  If  the  prices  of  stocks  and  bonds  only 
advanced  and  receded  when  corresponding  changes  occurred 
in  the  value  of  the  property  which  it  is  claimed  they  reprer 
sent  (and  this  would  be  the  case  if  the  stock  and  bond  the^ 
ory  had  any  value)  then  there  would  not  only  be  no  neces- 
sity for  obtaining  such  an  average  value,  but  it  would  be  an 
error  to  use  it  when  it  was  obtained,  because  it  would  be 
possible  to  determine  the  actual  value  of  the  property  from 
the  market  quotations  of  its  securities  at  the  date  fixed  for 
the  assessment,  and  that  is  exactly  what  we  want  to  know. 
Or,  to  state  my  proposition  in  just  a little  different  form, 
let  me  say — the  averaging  process  above  referred  to  could 
not  have  been  adopted  for  the  purpose  of  finding  the  aver- 


11 


age  value  of  the  railroad  property  through  a period  of  three, 
five  or  seven  years,  in  order  that  the  present  assessment  may 
be  fixed  at  that  sum.  Such  an  assessment  would  be  an  il- 
legality, and  could  on  proper  proof  that  the  assessor  or  as- 
sessors had  based  their  conclusions  on  that  theory,  be  set 
aside.  The  only  tenable  purposes  for  which  said  averages 
may  be  used,  is  that  they  will  aid  the  assessors  in  determining 
what  is  the  present  fair  value  of  the  property,  and  so  far  as 
they  serve  to  throw  light  on  that  proposition,  their  use  is 
appropriate  and  valuable. 

But  the  situation  with  regard  to  real  estate  is  altogether 
different.  Let  us  see. 

The  fact  that  real  estate  has  been  steadily  advancing  in 
value  during  the  last  eight  or  ten  years  is  universally  recog- 
nized and  is  undisputed.  It  was  never  before  so  valuable 
as  it  is  to-day.  Any  averaging  which  could  be  attempted 
must  be  made  with  prices  and  values  which  are  all  lower 
than  those  which  now  prevail,  and  must  of  necessity  fix  the 
value  of  Wisconsin  real  estate  at  a sum  which  is  less  than 
its  present  actual  worth.  By  thus  diminishing  the  value  of 
the  property  on  which  the  tax  rate  is  computed,  the  rate  of 
taxation  will  be  increased  and  as  this  higher  rate  is  to  be  ap- 
plied to  the  assessed  value  of  the  railroad  property,  injustice 
and  inequity  must  result. 

Further,  if  it  is  practicable  to  ascertain  the  present  value 
of  real  estate  for  the  purpose  of  comparing  and  averaging 
it  with  the  values  of  previous  years,  then  it  is  equally  prac- 
ticable to  determine  its  present  value  for  the  purpose  of  fix- 
ing the  value  of  the  general  property  of  the  state,  and  there 
is  no  apparent  justification,  or  excuse  or  reason  for  combin- 
ing such  value  with  the  values  of  real  estate  which  may  have 
obtained  in  other  years. 


12 


The  purpose  of  the  law  and  of  the  Board  of  Assessment  is 
to  ascertain  the  value  of  real  estate  as  of  the  year  1903,  the 
date  as  of  which  the  assessment  is  to  be  made,  and  our  efforts 
should  all  be  directed  to  ascertaining  values  as  they  existed 
at  that  date. 

It  does  not  help  us  to  know  what  the  real  estate  of  Wiscon- 
sin was  worth  on  May  1,  1903,  to  be  told  what  its  average 
assessment  has  been,  or  what  its  average  value  has  been 
through  five  preceding  years.  If  there  is  any  relation  be- 
tween assessment  values  and  the  values  that  are  expressed 
in  deeds  of  conveyance  in  the  cases  of  sale,  which  will  serve 
our  present  purpose  at  all,  then  it  must  have  reference  solely 
to  1903.  Let  me  illustrate  with  a single  example. 

We  will  suppose  that  five  years  before  the  period  when  our 
investigation  begins,  a particular  farm  was  recognized  as 
being  worth  $2,500.  The  assessor  will  do  pretty  well 
according  to  the  practice  which  our  investigations  show  to 
be  prevalent,  if  he  assesses  it  at  $1,500.  Gradually, 
through  the  progress  of  five  years  that  farm  has  advanced  to 
a value  of  $5,000.  It  will  probably — not  necessarily,  but 
probably — have  been  assessed  all  the  time  at  $1,500.  The 
changes  in  the  appearance  and  conditions  of  the  farm,  will 
perhaps  have  been  slight  and  such  as  did  not  attract  the  as- 
sessor’s attention  as  the  years  passed  along.  The  practice 
of  the  assessors  is  to  repeat  their  previous  figures  or  the  fig- 
ures of  their  predecessors,  and  it  is  more  than  probable 
that  at  the  end  of  the  five  years’  period,  we  will  find  the 
farm  which  has  advanced  in  value  to  $5,000  is  still  assessed 
at  $1,500.  We  started  in  five  years  ago  with  an  assessment 
of  $1,500  on  a farm  which  was  worth  $2,500.  The  ratio 
of  assessment  to  real  value  was  therefore  three-fifths.  At  the 
end  of  the  period  we  still  have  an  assessment  of  $1,500,  but 


13 


the  real  value  is  $5,000  and  the  ratio  of  assessment  is  re- 
duced to  three-tenths  instead  of  three-fifths. 

This  illustration  is  by  no  means  either  rare  or  fanciful.  I 
risk  nothing  in  saying  that  its  counterpart  can  be  found  in 
nearly  every  town  in  the  state,  and  what  is  here  assumed  as 
to  a single  piece  of  property,  will  be  found  to  apply  to 
large  portions  of  many  assessment  districts. 

Now,  let  us  suppose  that  at  some  time  during  this  five 
years’  period  a sale  of  some  wood  lot  or  pasture  lot  has  been 
made,  and  that  in  changing  the  name  of  the  owner,  the  as- 
sessor has  also  placed  an  assessment  on  that  particular  piece 
of  land  at  or  near  the  consideration  which  was  expressed  in 
the  deed,  and  further,  if  there  shall  have  been  several  such 
unimportant  transactions,  the  reported  sales  in  these  special 
cases  will  showT  that  the  ratio  of  assessment  is  quite  or  nearly 
equal  to  the  real  value,  and  the  conclusion  will  therefore  be 
reached  that  in  the  assessment  district  where  these  prop- 
erties are  situated,  that  the  rate  of  assessment  nearly  equals 
full  value,  although  as  we  have  seen,  as  to  the  vast  majority 
of  the  property,  the  assessment  does  not  exceed  30  per  cent, 
of  actual  values. 

The  most  serious  objections  to  the  use  of  the  information 
which  may  be  derived  from  the  reported  sales  of  real  prop- 
erty to  which  I have  already  referred,  as  a basis  for  the  as- 
certainment of  a ratio  between  assessment  values  and  act- 
ual values,  are,  however,  altogether  apart  from  the  question 
of  whether  said  reports  cover  a period  of  one  or  more  years. 

Every  one  will  consent  that  in  order  to  render  the  informa- 
tion derived  from  these  reports  of  any  value,  they  should 
contain  at  least  three  factors  on  which  we  can  absolutely 
rely. 

First.  The  consideration  which  is  expressed  in  the  con- 


I 


14 


veyance  must  be  the  actual  consideration  (expressed  in 
money)  for  which  the  property  was  sold. 

Second.  That  the  time  as  of  which  said  consideration 
is  predicated,  shall  bear  such  relation  to  the  time  of  the  as- 
signment as  to  negative  the  idea  of  any  probable  radical 
change  in  value  between  the  dates. 

Third.  That  both  the  assessed  value  and  the  sale  value 
shall  refer  to  the  same  property. 

In  a great  majority  of  the  reported  sales  some  one  or 
more  of  these  fundamental  conditions  do  not  exist. 

As  to  the  first,  it  is  often  found  that  the  stated  considera- 
tion applies  only  to  the  money  or  notes  which  pass  from  the 
vendor  to  the  vendee,  but  that  as  a matter  of  fact  there  is 
also  included  in  said  consideration,  the  assumption  by  the 
vendee  of  mortgage  incumbrances  or  other  liens,  which  are 
as  much  a part  of  the  consideration  as  is  the  money  which 
is  used  in  the  transaction,  but  which  do  not  appear  as  a 
part  of  the  price  for  which  the  property  is  sold.  Easements, 
privileges  or  burdens  of  various  kinds,  the  extent  and  nature 
of  which  can  only  be  ascertained  by  reading  the  instruments 
themselves,  are  of  frequent  occurrence  but  of  course  the 
report  to  the  Secretary  of  State  furnishes  no  clue  to  any 
such  facts,  although  they  often  seriously  modify  the  terms 
which  are  stated  in  the  document  itself  and  renders  the 
facts  on  which  the  investigator  relies  for  his  information, 
altogether  misleading. 

As  to  the  second  proposition  it  may  be  said  that  a great 
many  of  the  reported  conveyances  are  made  in  the  fulfill- 
ment of  contracts  entered  into  between  the  parties  many 
years  ago.  The  stated  consideration  is  the  sum  for  which 
the  property  was  sold  when  the  contract  was  made.  In 
many  instances  the  whole  character  of  the  property  has 


15 


changed  between  the  date  of  the  contract  and  the  date  of 
the  deed  and  the  value  may  have  greatly  increased  in  that 
interval.  None  of  these  facts,  however,  appear  in  the  re- 
port. It  is  impossible  for  any  investigator  to  ascertain  them 
from  the  report  furnished  by  the  register  of  deeds.  To  him 
everything  appears  to  be  fair,  regular  and  complete,  and 
he  has  no  choice  but  to  use  the  recorded  details  as  the  basis 
of  his  estimates,  with  the  necessary  result  that  his  conclu- 
sions are  wrong,  and  such  instances  are  sufficiently  numerous 
to  vitiate  any  calculations  which  are  based  upon  these  re- 
ports. 

As  to  the  third  proposition  it  is  frequently  found  that 
property  which  is  described  in  the  assessor’s  book  and  in  the 
deed  of  conveyance  in  identical  terms,  is  far  from  being 
the  same  property  when  it  is  sold  and  when  it  is  assessed. 
For  example:  A piece  of  property  located  in  Madison  or 

Milwaukee  and  described  as  lot  4 in  block  8 of  said  city, 
may  have  an  actual  value  of  $50,000,  of  which  one-half 
may  represent  the  land  and  one-half  the  improvements  which 
have  been  placed  upon  it.  On  the  first  day  of  May  the 
assessor  places  his  value  upon  it,  which  is,  say  $40,000.  The 
assessment  is  therefore  four-fifths  of  the  real  value.  Now, 
suppose  that  on  the  tenth  day  of  June  the  improvement  is 
destroyed  and  that  on  the  first  day  of  July  the  property  is 
sold,  the  price  obtained  being  the  value  of  the  land,  or 
$25,000. 

On  the  15th  day  of  September  the  register  of  deeds  in  the 
performance  of  his  duty,  reports  to  the  Secretary  of  State 
that  lot  4 of  block  8 was  sold  for  $25,000,  and  that  it  had 
been  assessed  for  $40,000,  or  for  three-fifths  more  than  its 
full  value.  The  converse  of  this  proposition  would  be  true, 
if  instead  of  an  improvement  being  destroyed,  a similar  one 


16 


had  been  constructed  in  the  meantime.  In  each  case  the 
assessor  and  the  register  of  deeds  has  described  the  prop- 
erty as  lot  4 in  block  8 and  both  of  these  officers  have  prop- 
erly performed  their  duty.  But  the  inquirer  who  is  looking 
for  information  as  to  the  relation  between  assessed  and  actual 
values  is  led  far  astray  by  their  reports. 

Our  Committee  found  that  in  the  time  at  our  disposal 
it  would  be  impossible  to  extend  our  examinations  over  th^ 
entire  state.  It  was  necessary  to  limit  the  territory  which 
we  would  try  to  cover.  We  were  aware  that  Milwaukee 
County  embraces  about  one-sixth  or  one-fifth  of  the  prop- 
erty values  of  the  entire  state,  and  it  seemed  as  if  we  could 
work  there  more  effectively  than  we  could  in  any  other 
one  county  of  the  state:  and  we  began  our  investigations  in 
that  locality.  We  secured  the  services  of  Mr.  T.  H.  Brown, 
who  was  for  nine  years  Tax  Commissioner  of  Milwaukee, 
and  wTho  is  as  expert  and  experienced  in  all  matters  relat- 
ing to  property  values  as  any  gentleman  in  the  state.  His 
long  period  of  service  in  the  office  named  had  made  him 
especially  familiar  with  Milwaukee  property. 

The  result  of  his  investigations  we  place  before  you  in 
the  form  of  a voluminous  report,  which,  of  course,  we  do  not 
expect  to  take  time  now  to  read,  but  it  is  as  to  the  conclu- 
sions which  are  reached  in  that  report,  that  I am  now  about 
to  speak;  a little  later  Mr.  Brown  will  probably  himself 
speak  in  explanation  of  his  report.  Inasmuch  as  the  work  of 
Mr.  Brown  was  to  a considerable  extent  devoted  to  testing 
the  trustworthiness  of  the  report  of  the  conveyances  made 
by  the  register  of  deeds,  as  a basis  for  ascertaining  real  es- 
tate values,  it  might  be  helpful  to  have  the  law  which  pro- 
vides for  the  making  of  that  report  read,  so  that  we  may 
have  in  mind  its  exact  terms.  Mr.  Dudley  has,  I believe, 


17 


copied  the  essential  portion  of  that  statute  and  I will  ask 
him  if  he  will  kindly  read  it  for  us. 

(Mr.  Dudley  hereupon  read  Chapter  373  of  the  Laws  of 
1903.) 

Mr.  Crandon : It  is  seen  that  the  law  itself  excludes 

from  the  reported  sales  a very  large  number  of  convey- 
ances, and  this  is  right.  Mr.  Brown  found  that  during  Ihe 
year  covered  by  his  examinations  and  speaking  in  round 
numbers,  8,000  deeds  had  been  recorded  in  Milwaukee 
County.  Pursuing  the  process  of  elimination  which  is  pro- 
vided by  the  statute,  the  register  of  deeds  had  included  in 
his  report  to  the  Secretary  of  State  1,105  transactions.  The 
conveyances  thus  reported  were  submitted  to  a most  caicful 
scrutiny. 

Mr.  Curtis : Deported  in  what  year  ? 

Mr.  Crandon:  The  year  preceding  September  1,  1903. 

It  was  determined  to  ascertain  the  exact  conditions  under 
which  each  of  these  conveyances  had  been  made.  The  deeds 
were  first  carefully  read  and  all  the  information  which  they 
disclosed  was  fully  noted.  Mr.  Brown’s  extensive  personal 
acquaintance  rendered  it  easy  for  him  to  confer  with  the 
parties  to  the  various  transactions  and  learn  exactly  what 
each  one  involved.  This  he  did.  He  also  examined  the 
several  properties  which  were  described  in  the  deeds  to 
ascertain  their  physical  condition  and  to  inform  himself 
whether  any  important  changes  resulting  from  the  construc- 
tion or  removal  of  improvements,  or  from  the  special  busi- 
ness changes  in  the  adjacent  locality,  had  taken  place  be- 
tween the  date  of  the  assessment  and  the  date*  of  sale  of  the 
property  involved  and  in  this  way  he  became  familiar  with 
all  the  facts  relating  to  each  reported  sale.  The  result  was, 
that  of  the  1,105  conveyances  which  had  been  included  in 


18 


the  report  of  the  register  of  deeds,  593 — more  than  one- 
half — were  found  to  be  so  defective  or  misleading  that  they 
could  not  afford  any  reliable  information  as  to  the  trans- 
actions to  which  they  referred. 

These  defects  were  of  the  most  varied  character.  Often 
the  consideration  wTas  deliberately  misstated.  Many  times 
the  consideration  named  took  no  account  of  existing  mort- 
gage obligations  which  were  assumed  by  the  purchaser  and 
which  evidenced  the  value  of  the  property  quite  as  much 
as  did  the  cash  payments  noted  in  the  transaction.  So  ex- 
tensive is  this  feature  of  real  estate  transactions,  that  in 
counties,  other  than  Milwaukee,  it  was  found  to  be  a usual 
practice.  A certain  number  of  deeds  which  had  been  re- 
ported by  the  register  were  examined  and  it  was  found  that 
the  aggregate  consideration  contained  in  the  group,  amounted 
to  $70,000,  while  the  actual  consideration  was  practically 
twice  that  sum.  I have  forgotten  the  exact,  amount,  but 
Mr.  Dudley  will  report  it  exactly,  which  I am  not  now 
able  to  do.  It  also  often  appeared  that  varying  amounts  of 
personal  property  were  included  in  the  real  estate  deals, 
but  the  value  of  such  personalty  wras  entirely  omitted  from 
the  deeds  which  were  given  for  the  property.  While  these 
facts  do  not  imply  the  slightest  dishonesty  or  impropriety 
on  the  part  of  the  principals  in  the  several  transactions  re- 
ferred to,  as  neither  law  nor  equity  demands  that  all  the  de- 
tails of  a trade  shall  appear  in  real  estate  conveyances,  they 
do,  nevertheless,  illustrate  how  absolutely  untrustworthy 
these  documents  become  as  a source  from  which  the  informa- 
tion which  we  are  seeking,  is  to  be  secured.  If,  for  example, 
the  examiner  is  led  to  assume  that  the  value  of  certain  prop- 
erties which  have  been  sold  is  $70,000,  as  just  noted,  when 
the  real  value  as  it  was  fixed  by  the  parties  to  the  transac- 
tion was  $140,000,  it  goes  without  the  saying,  that  conclu- 


19 


sions  based  on  the  faulty  information,  must  themselves  be 
unreliable. 

But  these  misleading  statements  could  not  have  been 
known  to  the  Tax  Commission  when  it  was  making  its  investi- 
gation, nor  to  Mr.  Polley’s  when  he  was  revising  the  Com- 
mission’s computations,  or  to  anyone  else  who  did  not  in- 
form himself  of  the  facts  by  a process  equivalent  to  that 
which  Mr.  Brown  pursued. 

After  securing  the  necessary  information  as  to  the  values 
of  the  properties  which  had  been  sold,  Mr.  Brown  exam- 
ined the  books  of  the  assessors  and  ascertained  the  amount 
of  the  various  assessments  which  had  been  placed  upon 
them.  All  of  this  work  consumed  much  time,  but  it  was 
so  thorough  and  complete  as  to  include  all  the  information 
as  to  values,  which  could  be  obtained  from  the  actual  real 
estate  sales.  The  result  of  it  all  was,  that  we  have  correct 
information  as  to  the  price  for  which  the  several  pieces  of 
real  estate  included  in  the  report  before  you,  have  been 
sold,  and  the  actual  assessment  of  the  same,  and  hence 
are  able  to  determine  the  ratio  between  assessed  and  actual 
values  with  an  authority  which  cannot  be  intelligently  ques- 
tioned. 

Mr.  Brown  will  tell  you  that  his  examinations  have  estab- 
lished the  fact  that  all  of  the  defects  and  inaccuracies  which 
I have  brought  to  your  attention,  not  only  exist,  but  that 
they  exist  to  an  extent  which  absolutely  discredits  any  con- 
clusions which  are  based  upon  an  acceptance  of  the  data 
furnished  by  the  register  of  deeds,  without  first  subjecting 
that  data  to  a sifting  process  similar  to  that  which  was  used 
by  himself,  and  I will  leave  to  him  any  further  elaboration 
of  this  proposition  which,  may  be  desired. 

The  same  sort  of  examination  in  every  detail  was  made 


20 


as  to  the  property  of  the  County  of  Milwaukee  outside  of  the 
city. 

And  now  what  is  the  result  of  all  of  this  work? 

It  is  before  you  in  the  report  which  is  submitted  by  Mr. 
Brown.  I have  acquainted  you  with  the  careful,  pains- 
taking and  exhaustive  process  by  which  this  information  was 
obtained.  In  tables  with  appropriate  headings  and  explana- 
tions will  be  found  the  description  of  the  property,  its  real 
value  as  determined,  by  Mr.  Brown’s  work,  and  the  valuation 
as  it  was  fixed  by  the  assessor.  I do  not.  believe  that  any 
information  which  approaches  this  report  in  point  of  relia- 
bility can  be  ftund  anywhere  else.  And  from  the  report 
it  is  found  that  the  property  of  Milwaukee  City  is  assessed 
as  about  52  per  cent,  of  its  actual  value;  52.07  per  cent,  is,  I 
think,  the  exact  fraction,  and  the  property  of  Milwaukee 
County  outside  of  the  city  is  assessed  at  42.84  per  cent.  But, 
accurate  and  reliable  as  we  believed  Mr.  Brown’s  work  to  be, 
we  wTere  not  quite  satisfied  to  rest  our  whole  case  on  the  in- 
formation which  was  thus  obtained. 

There  is  a corporation  in  Milwaukee  organized  for  the 
especial  purpose  of  appraising  all  sorts  of  properties.  It 
appraises  properties  in  cases  where  other  corporations  are 
being  consolidated  under  the  terms  of  the  law,  and  the  of- 
ficers of  the  different  companies  need  to  know  the  value  of 
the  property  held  by  each  individually.  It  appraises  estates 
where  there  is  to  be  a subdivision  of  the  property  under 
the  order  of  the  courts ; in  a word,  it  appraises  property  of 
all  sorts  and  conditions. 

The  business  of  this  corporation  is  so  extensive  and  its 
services  are  so  often  employed  by  litigants  and  courts,  that 
its  work  seems  to  be  invested  with  a sort  of  semi-official  char- 
acter that  commands  the  respect  and  confidence  of  the  busi- 


21 


ness  community  and  to  be  frequently  recognized  by  the 
courts.  Our  Committee  decided  to  avail  itself  of  the  serv- 
ices of  this  corporation  and  we  asked  Mr.  Brown  to  select 
twenty  pieces  of  real  estate  in  each  ward  to  be  valued  by 
the  Appraisal  Company.  The  parcels  of  ground  selected 
for  this  purpose  were  to  be  representative  properties,  embrac- 
ing residence,  business,  dock  and  manufacturing  sites  and 
were  to  be  taken  from  all  parts  of  the  city,  and  were  not  to 
include  any  of  the  properties  which  had  been  considered  in 
his  own  report. 

Mr.  Brown  made  these  selections  and  the  list  was  sent  to 
the  Appraisal  Company. 

Mr.  Baldwin:  The  selections  were  made  up  of  a certain 

number  of  parcels  in  each  ward  ? 

Mr.  Crandon : Yes;  it  was  intended  to  select  about  twenty 
pieces  in  each  ward.  There  was  no  knowledge  on  the  part 
of  the  Appraisal  Company  as  to  why  we  wanted  that  par- 
ticular property  examined  and  valued.  We  paid  for  this 
service  $2,000,  or  something  of  that  kind. 

Mr.  Dudley:  $2,500. 

Mr.  Crandon : $2,500  to  go  over  the  city  and  make  ap- 

praisals, just  as  they  would  if  they  were  making  them  for 
the  subdivision  of  an  estate,  or  for  the  purpose  of  consoli- 
dation of  companies,  or  for  any  other  purpose,  where  the 
sole  object  was  to  secure  a statement  of  the  actual  value  of 
the  land.  The  land  alone  was  to  be  included  in  said  valua- 
tions; all  buildings  and  other  improvements  were  to  be  dis- 
regarded. After  the  company  had  made  its  appraisal  and 
report,  which  we  have  here  and  which  we  herewith  submit,  the 
value  of  each  piece  was  compared  with  the  value  as  stated  in 
the  assessment  roll — or  the  assessment  of  that  particular 
piece  was  set  opposite  to  the  appraisal.  The  result  of  that 


22 


examination  was  that  we  found  that  the  ratio  of  assessed 
value  to  the  value  of  the  property  as  fixed  by  the  Appraisal 
Company  very  closely  approximated  that  which  had  been 
reached  by  another  method  by  Mr.  Brown.  Will  Mr.  Dudley 
give  me  the  exact  figures  ? 

Mr.  Dudley:  52.57  per  cent.,  and  the  result  reached  by 

Mr.  Brown  by  the  other  method  was  52.07  per  cent. 

Mr.  Crandon:  These  results  are  so  nearly  identical,  al- 

though arrived  at  by  entirely  different  processes  and  by  dif- 
ferent men  working  each  independently,  that  they  seem  to 
confirm  each  other. 

Now,  gentlemen,  not  to  weary  you  further  with  detail, 
but  for  your  information,  let  me  say  that  a similar  process 
was  gone  through  with  for  the  property  outside  of  the  city 
of  Milwaul  ee. 

Mr.  Peck  : In  the  County  of  Milwaukee  ? 

Mr.  Crandon : In  the  County  of  Milwaukee,  but  outside 

of  the  city. 

Mr.  Baldwin : Unless  you  are  going  back  to  it,  I would 

like  to  have  you  or  Mr.  Dudley  read  the  Appraisal  Com- 
pany’s own  statement  with  regard  to  their  work. 

Mr.  Crandon : I will  stop  for  him  to  do  that  now,  if  he 

will. 

Mr.  Dudley:  Here  is  their  report  to  which  is  attached  a 

certificate. 

Chairman  Gilson:  What  is  the  name  of  the  company? 

Mr.  Dudley:  The  American  Appraisal  Company. 

Chairman  Gilson : The  assessment  you  refer  to  as  having 

been  employed  is  the  assessment  of  1902  ? 

Mr.  Crandon:  1903.  All  our  work  refers  to  1903. 


23 


Mr.  Dudley  (reading)  : “The  American  Appraisal  Com- 

pany, a corporation  duly  organized,  created  and  existing 
under  and  by  virtue  of  the  laws  of  the  State  of  Wisconsin, 
hereby  certifies,  by  its  president  and  secretary,  that  it  has 
inspected  and  appraised  the  premises  described  in  the  ac- 
companying schedule  hereto  annexed ; and  hereby  made  a 
part  hereof,  being  certain  lots  and  tracts  of  land  situated 
and  being  in  the  City  of  Milwaukee,  County  of  Milwau- 
kee, and  State  of  Wisconsin ; and  that  after  such  inspection 
it  is  of  the  opinion  that  said  land  and  tracts  of  land  con- 
tained in  said  several  descriptions  mentioned  in  said  sched- 
ule are  reasonably  and  justly  worth  the  sums  annexed  to 
said  several  descriptions. 

American  Appraisal  Company, 

By  E.  H.  Bottum, 

President 

In  addition  to  that  is  an  affidavit,  which  sets  forth  the 
nature  of  the  company  somewhat  ; and  here  also  is  a pros- 
pectus of  the  company,  which  shows  in  detail  the  work  they 
have  done,  and  its  character. 

(Reading)  : “John  L.  Moon,  being  first  duly  sworn,  deposes 
and  says  that  he  resides  in  the  City  of  Milwaukee,  Wiscon- 
sin, and  that  he  is  secretary  of  the  American  Appraisal  Co., 
a corporation  duly  organized  under  the  laws  of  the  State 
of  Wisconsin,  and  located  in  the  City  of  Milwaukee,  Wiscon- 
sin; that  said  corporation  was  organized  in  March,  1898, 
for  the  purpose  of  appraising  property  of  large  manufact- 
uring industries,  both  real  and  personal ; and  also  property 
of  every  name,  nature  and  description  for  whatsoever  pur- 
pose. That  said  company  has  had  an  extensive  experience 
throughout  the  United  States  and  the  Dominion  of  Canada 
in  making  appraisals,  and  has  appraised  property  of  the 
value  of  many  millions  of  dollars  annually,  during  its  exist- 
ence; and  that  during  the  past  year  it  has  appraised  for  its 
customers  property,  both  real  and  personal,  of  the  value  of 
$200,000,000  and  over.  That  said  company  has  in  its  em- 
ploy many  experienced  men,  and  is  thoroughly  equipped, 
competent  and  qualified  to  make  such  appraisal. 

John  L.  Moon.” 


24 


Mr.  Baldwin:  We  propose  to  place  the  Appraisal  Com- 

pany’s report  at  the  disposal  of  the  Board  of  Assessment. 

Mr.  "Dudley : This  report  contains  a list  of  the  properties, 
and  here  is  the  same  list  with  the  assessment  of  1903  placed 
opposite  the  description. 

Mr.  Haugen:  Have  you  the  assessment  of  1903  of  Mil- 

waukee, or  of  the  real  estate? 

Chairman  Gilson : It  is  only  the  assessment  of  Ihe  prop- 

erty therein  specified. 

Mr.  Haugen:  You  have  not  the  total  assessment? 

Mr.  Dudley  I can  give  it  to  you  presently.  I will  have 
to  look  it  up.  I will  give  you  presently  the  totals  of  each. 

Mr.  Curtis:  In  connection  with  the  statistics  from  the 

Appraisal  Company  are  the  names  of  the  individuals  whose 
judgment  has  entered  into  the  valuation  given? 

Mr.  Dudley:  That  is  not  given  in  the  report.  We  went 

to  the  company  and  asked  them  to  appraise  the  property  in 
the  same  manner  that  they  would  appraise  it  for  any  other 
customer;  and  the  work  which  they  do  in  appraising  real 
estate  consists  very  largely  of  cases  where  different  companies 
are  to  be  consolidated  and  the  real  estate  of  each  is  put  in 
at  its  true  valuation.  This  company  acts  as  a sort  of  board 
of  arbitration,  I suppose,  in  ascertaining  the  values.  We 
asked  them  to  deal  with  the  property  named  in  our  list  in 
that  manner,  and  in  their  own  way  to  ascertain  the  value  of 
the  property.  The  various  individuals  who  were  actually 
employed  on  the  work  I don’t  know.  It  doesn’t  state  here. 

Mr.  Curtis  : Of  course',  the  figures  represent  the  opinions 
of  individuals,  either  averaged  or  obtained  otherwise.  That 
is  why  I inquired. 


25 


Mr.  Dudley:  Yes;  that  is,  they  are  not  based  necessarily 
on  the  opinion  of  one  individual. 

Mr.  Curtis : The  corporation  as  such,  could  have  no  opin- 
ion. 

Mr.  Baldwin:  Could  we  not  furnish,  if  the  Commission 

desire  it,  the  names  of  the  individuals  who  acted  for  the 
Appraisal  Company  ? 

Mr.  Dudley:  I don’t  know  of  any  reason  why  we  could 

not.  These  particular  pieces  were  not  properties  that  had 
been  sold.  Of  course,  the  report  is  not.  based  upon  actual 
sales,  but  the  appraisers  undoubtedly  took  into  considera- 
tion sales  of  property  in  the  same  neighborhood. 

Mr.  Peck:  The  men  who  made  the  appraisement  are  un- 

doubtedly those  experienced  men  spoken  of  in  the  certifi- 
cate. It  is  said  that  the  company  employs  a large  num- 
ber of  experienced  men  in  that  business.  It  does  not  seem 
to  me  very  material  what  their  names  are,  because  the  Com 
mission  probably  would  not  know  them,  but  it  would  be  well 
enough  to  furnish  them.  Ask  them  who  they  were. 

Mr.  Curtis  : That  is  all  Mr.  Crandon? 

Mr.  Baldwin:  We  don’t  know  who  they  were  at  all. 

Mr.  Crandon : There  was  another  method  of  ascertain- 

ing the  values  of  Milwaukee  property,  adopted  by  the  Chi- 
cago, Milwaukee  and  St.  Paul  Railway  Company  for  its  own 
purposes.  I will  leave  it  for  Mr.  Dudley  to  tell  you  about 
the  method  adopted  because  it  is  more  familiar  to  him  than 
to  me.  The  result  of  it  was  that  a ratio  of  assessed  to  real 
values  was  arrived  at,  which  was  about  47  per  cent.  Am  I 
correct  ? 

Mr.  Dudley:  Yes;  47  and  a fraction. 

Mr.  Crandon:  As  I have  already  said  outside  of  Mil- 


26 


waukee  City,  but  in  Milwaukee  County,  this  same  process 
which  has  been  already  described  was  pursued,  with  the 
result  of  determining  that  the  property  outside  of  Milwau- 
kee City  is  assessed  at  42.84  per  cent. 

We  claim  now  to  have  shown  by  the  best  evidence  that  is 
in  existence  that  Milwaukee  County  is  assessed  at  not  to  ex- 
ceed 50  per  cent,  of  its  real  value.  Unless  the  integrity  of 
our  work  is  challenged,  this  conclusion  must  be  accepted, 
and  any  attempt  to  explain  it  away,  or  to  make  it  fit  any 
theory  which  does  not  accept  this  result,  will  fail  before 
the  facts  which  we  have  presented  for  your  consideration. 
The  evidence  that  the  assessment  of  Milwaukee  County  for 
1903  does  not  exceed  50  per  cent,  of  real  value  is  convincing 
and  complete. 

The  facilities  for  pursuing  our  investigations  beyond  Mil- 
waukee County  wTere  not  so  good  as  those  of  which  we 
could  avail  ourselves  for  that  county.  However,  this  field 
has  not  been  neglected. 

The  Board  will  remember  that  there  is  a provision  of  the 
Wisconsin  law  which  enables  any  special  locality,  a city,  or  a 
town,  if  it  feels  itself  discriminated  against  in  the  matter  of 
equalization,  to  apply  to  the  Circuit  Court  of  the  county  for 
a commission  to  equalize  the  assessed  values  between  the  dif- 
ferent taxing  districts.  We  found  that  there  are  a number 
of  counties  where  recently  that  sort  of  proceeding  had  been 
had ; and  we  brought  to  our  aid  the  men  who  had  been 
appointed  upon  those  commissions,  to  tell  us  what  they 
found, — what  their  examinations  had  disclosed  to  them, — 
in  regard  to  the  relation  of  real  to  assessed  value. 

Just  let  me  read  from  one  of  them  a statement  of  what 
they  did.  This  refers  to  Outagamie  County.  First  it  tells 
how  the  appointment  was  made,  and  of  the  notice  given  of 


27 


the  commission’s  appointment,  and  then  goes  on  to  say : 
“After  our  appointment  and  qualification  as  such  commis- 
sioners and  on  and  between  the  8th  day  of  June  and  the  7th 
day  of  September,  we  made  a general  and  careful  review  of 
the  property  in  each  town,  city  and  village  in  said  county, 
in  order  to  ascertain  and  determine  as  accurately  as  possi- 
ble, the  value  of  all  of  said  real  estate,  for  the  year  1902, 
at  the  time  the  same  was  assessed ; and  that  before  the  final 
determination  by  us  upon  the  valuations  which  we  were  to 
examine  and  review,  we  appointed  a convenient  time  and 
place  in  said  county  for  the  hearing  of  evidence  and  argu- 
ments upon  the  valuations  under  review  to  be  offered  by 
any  taxpayer  of  any  city,  village  or  town  in  said  county, 
such  time  and  place  being  at  the  court  house  on  the  25th 
day  of  August ; that  we  duly  gave  notice  of  such  time  and 
place  by  mail,  at  least  ten  days  before  such  time  set  for 
hearing  to  the  clerk  of  each  city,  village  or  town  in  the 
county  of  Outagamie ; that  we  appeared  at  the  time  and  place 
mentioned  in  said  notice,  at  which  time  Lyman  E.  Barnes, 
John  Bottensok  and  Thos.  Ryan  appeared  for  the  peti- 
tioner,” and  other  men  whose  names  are  given  here  appeared 
for  the  towns  and  villages  of  the  county.  “And  we  pro- 
ceeded to  hear  and  did  hear  arguments  from  and  on  behalf 
of  the  taxpayers  of  said  cities,  towns  and  villages,  called  for 
and  examined  assessments,  taxpayers  and  records  in  the 
county,  and  continued  to  hear  said  evidence  and  arguments 
in  relation  to'  the  valuation  of  property  in  said  county,  so 
far  as  such  valuation  bears  on  the  just  aggregate  valuation 
of  any  city,  village  or  town  therein,  each  day  from  the  25th 
day  of  August  to  the  Jsr  day  of  September,  inclusive.  That 
we  sat  in  such  hearing  of  evidence  and  arguments  for  a 
period  of  at  least  six  days.  That  thereafter,  upon  due  ex- 
amination and  consideration^of  the  evidence  and  arguments 


28 


produced  at  said  hearing  together  with  said  assessments  and 
records  of  the  county  bearing  upon  the  valuations  under  re- 
view, and  all  other  facts  obtained  by  review  and  examina- 
tion as  required  by  law,  the  said  commissioners  made  their 
findings,  which  were  duly  reported  to  the  court. 

“In  our  examinations  we  personally  travelled  over  nearly 
every  road  in  the  county;  we  examined  the  property  in  de- 
tail; we  familiarized  ourselves  with  the  values  of  real  es- 
tate, both  from  the  prices  asked  by  the  owners,  the  values 
fixed  upon  the  same  property  by  real  estate  dealers,  and  by 
consideration  of  the  sales  which  have  taken  place,  and  the 
income  which  the  property  will  produce'.  As  the  result  of 
this  examination,  we  find  that  the  true  value  of  the  real 
estate  of  Outagamie  County  for  the  year  1903  is  at  least 
$36,106,351.  The  assessed  value  being  $27,440,837,  or  76 
per  cent,  of  actual  value. 

“In  order  that  comparisons  may  be  made  between  values 
fixed  by  local  assessors  and  true  values,  we  attach  hereto 
a list  of  several  assessments  in  each  taxing  district,  and 
our  opinion  of  the  true  value  of  the  same  tracts  of  land, 
said  values  being  based  upon  our  personal  examinations.” 

Now,  of  course,  such  commissions  were  not  called  for 
or  appointed  in  all  the  counties,  and  we  could  only  avail  our- 
selves of  the  services  of  such  as  had  been  established. 

Chairman  Gilson:  Right  at  this  point,  Mr.  Crandon — 

the  aggregate  of  the  value  in  Outagamie  County  found  by 
this  commission  is  the  same  as  the  valuation  made  by  the 
county  board,  is  it  not? 

Mr.  Crandon : R o,  sir.  They  find,  as  I understand  it, 

the  value  of  the  property  in  the  several  taxing  districts,  such 
as  towns,  cities,  etc.,  and  then  equalize  the  assessed  valuation 
between  the  different  districts.  The  $36,000,000  named  in 
the  report  which  I read,  is,  in  the  judgment  of  the  men 
who  signed  that  report,  the  present  value  of  the  real  estate 
in  Outagamie  County. 


29 


Mr.  Haugen : Is  that  1902  or  1903  ? 

Mr.  Crandon:  The  $36,000,000  is  the  value  for  1903. 

Mr.  Haugen : But  they  were  acting  upon  the  assessment 

of  1902 ; that  is,  the  assessment  they  were  endeavoring  to 
correct. 

Mr.  Crandon:  $36,106,151  is  their  judgment  of  the  pres- 
ent, actual  value.  The  assessment  of  this  year  is  $27,440,- 
837. 

Mr.  Curtis : The  local  assessment  ? 

Mr.  Crandon : The  local  assessment.  I won’t  try  to  go 

through  with  each  one  of  these.  We  have  reports  from  six 
counties  in  which  there  were  such  commissions,  and  from 
three  or  four  counties,  I don’t  remember  just  exactly 
which — where  we  got  our  reports  as  to  assessed  and  real 
values  from  the  supervisors  of  assessments.  The  results 
run  from  about,  I think,  80  per  cent,  as  the  highest  assessed 
valuation  to  perhaps  54|-  per  cent,  as  the  lowest  assessed 
valuation. 

Mr.  Curtis  : That  is  the  ratio  between  the  local  assess- 

ment and  the  true  value? 

Mr.  Crandon:  Between  the  assessed  value  and  the  real 

value.  From  which  we  deduced — or,  rather  I deduced,  as 
I believe  my  associates  think  that  my  estimate  of  the  ratio 
of  assessment  is  a little  too  high — that  as  an  average  the 
assessed  value  of  the  property  outside  of  Milwaukee  County 
does  not  exceed  two-thirds  of  its  real  value — 66  2/3  per 
cent. 

Mr.  Curtis:  You  are  still  speaking  of  the  local  assess- 

ment ? 

Mr.  Crandon : I am  talking  now  entirely  of  the  local  as- 
sessment as  compared  with  the  real  value.  The  local  assess- 


30 


ment  of  the  state  for  1903  amounts  to  $1,120,086,060. 
I claim  that  we  have  substantiated  by  the  best 

possible  evidence,  and  by  evidence  that  cannot  be 
refuted  by  anything  in  existence  to-day,  that  Mil- 
waukee County  is  not  assessed  at  over  50  per 
cent.  And  by  less  adequate  and  less  comprehensive  and  less 
specific  information,  but  still  by  information  that  is  better 
than  anything  else  that  has  been  procured  by  any  person 
or  that  has  been  presented  anywhere,  or  that  exists  any- 
where, that  the  ratio  of  assessment  to  real  value  outside  of 
Milwaukee  County  does  not  exceed  two-thirds  of  the  value 
of  the  property. 

Since  arriving  here  yesterday,  we  have  received  the  re- 
sults of  the  examinations  in  two  other  counties — Ozaukee 
and  Racine.  I have  not  had  an  opportunity  to  tabulate 
them.  Mr.  Dudley  has  done  some  work  on  that  line,  enough 
to  show  that  they  present  substantially  the  same  conditions 
and  similar  facts  to  those  which  are  found  to  exist  in  other 
localities.  These  examinations  were  made  by  Mr.  Brown. 
He  has  not  completed  his  work,  but  it  has  been  prosecuted 
on  the  same  theory  that  was  adopted  for  Milwaukee  County. 
Mr.  Brown,  am  I right  in  assuming  that  50  per  cent,  will 
give  about  the  average  between  the  assessed  and  real  value 
in  those  counties? 

Mr.  Thos.  II.  Brown:  I believe  that  to  be  trueij  sir. 

Mr.  Crandon : That  is  what  I understood  yesterday. 

Here,  then,  are  two  other  counties,  important  counties,  in 
which,  so  far  as  the  actual  assessment  is  concerned,  for  1903, 
it  does  not  exceed  50  per  cent,  of  the  real  value.  Let  me 
say  here,  in  passing,  because  I do  not  want  to  come  back  to 
the  subject  again,  the  Committee  will  be  very  willing  in- 
deed, if  the  time  permits  it, — and  I believe  that  there  will 


31 


be  some  time  yet  before  the  Board  has  to  determine  this 
question  of  rates,  will  there  not  be? 

Chairman  Gilson : There  will  be  some  time.  We  cannot 

now  specify  how  much  it  will  be. 

Mr.  Crandon : Then  there  is  some  time  yet  for  continuing 
these  examinations  before  you  need  to  determine  finally  what 
is  the  real  value  of  the  general  property  of  the  state,  isn’t 
there  ? 

Mr.  Gilson : There  may  be  some,  although  if  we  should 

undertake  to  verify  any  data  you  should  present,  it  would 
have  to  be  done  very  soon,  I think. 

Mr.  Crandon : The  Committee  will  gladly  extend  these 

examinations  further  if  the  Board  considers  that  the  re- 
sults are  valuable,  and  if  there  is  any  reason  to  expect  that 
the  outcome  of  our  work  will  be  taken  into  account  in  the' 
final  computation.  We  have  tried  so  to  distribute  our  in- 
quiries over  the  different  parts  of  the  state  as  to  make  our 
calculations  a fair  average  of  the  whole;  and  I think  that 
the  work  which  has  been  done,  while  it  has  not,  been  entirely 
satisfactory  even  to  ourselves,  and  while  perhaps  no  such 
work  could  ever  be  exactly  accurate,  has,  nevertheless,  been 
as  effective  in  bringing  out  the  facts  that  we  need  for  the 
purposes  of  this  conference',  as  it  has  been  possible  to  make  it. 

The  line  of  examination  as  to  the  values  of  personal 
property  is  very  much  less  distinct  and  conclusive  than  that 
which  relates  to  real  estate.  Mr.  Baldwin  has  that  matter 
in  charge  and  will  present  it  in  detail  so  far  as  any  conclu- 
sions have  been  reached  by  the  Committee.  The  subdivis- 
ions of  the  assessor’s  personal  property  schedules,  are  not 
such  as  to  make  it  possible  to  collect  much  information  that 
can  be  used  to  test  the  accuracy  of  said  assessments.  Of 


32 


course,  our  Committee  could  not  enumerate . the  live  stock 
in  the  state,  or  ascertain  the  number  or  values  of  the  pianos, 
watches,  wagons,  carriages  or  sleighs  in  the  state,  but  there  is 
an  item  entitled  “Merchants’  and  Manufacturers’  stock” 
which  is  specifically  set  forth  in  the  assessment  schedules, 
as  to  which  some  reasonably  accurate  information  could  be 
obtained  with  the  opportunity  of  comparing  the  same  with 
the  assessors’  figures. 

The  amount  of  this  item  in  the  1903  assessment  roll  for 
the  state  is  about  $61,000,000.  It  was  found  by  applying 
to  the  merchantile  agencies  that  there  had  been  reported  to 
them  by  the  men,  who  state,  each  for  himself,  the  value  of 
what  he  had  on  hand  of  that  sort  of  property,  that  it  amounts 
to  at  least  $180,000,000,  and  probably  there  is  enough  of 
similar  property  which  is  unreported,  to  bring  up  the  whole 
amount  to  not  less  than  $200,000,000. 

Such  examinations  as  we  have  been  able  to  make  con- 
vince us  that  not  to  exceed  25  per  cent,  of  the  actual  value 
of  the  personal  property  is  assessed.  We  believe  it  to  be 
actually  much  less  than  that. 

Some  of  the  property  that  is  assessed,  is  valued  at  more 
than  25  per  cent,  of  its  real  worth ; but  there  is  a large 
amount  of  property  which  is  unassessed  entirely,  even  of 
those  items  which  are  assessed  in  classes,  specifically  and 
by  number. 

Perhaps  it  will  be  objected  that  in  dealing  with  property 
that  is  not  on  the  assessment  roll,  we  are  travelling  outside 
of  the  provisions  of  the  statute.  I understood  that.  I do 
not  know  exactly  what  interpretation  the  Board  is  inclined 
to  place  on  that  section  of  the  law  which  relates  to  this 
subject,  but  in  any  event  this  is  truer.  In  all  good  con- 
science the  value  of  this  property  ought  in  some  way  to  be 


33 


considered  when  the  rate  of  taxation  on  railroad  property  is 
being  determined  by  what  the  law  designates,  as  the  average 
rate  of  taxation  paid  by  the  general  property  of  the  state. 

We  will  assume,  as  was1  said  to  me  yesterday  in  the  hotel — 
that  the  assessment  of  personal  property  in  this  state  and  in 
other  states,  is  a mere  farce;  that  it  does  not  in  any  way 
amount  to  an  assessment;  that  it  is  a mere  guess;  that  it  is 
the  guess  of  an  assessor  based  only  on  other  guesses  of  peo- 
ple who  know  little  about  the  facts;  that  the  assessor 
not  only  does  not  get  at  a tithe  of  the  property ; that  he  does 
not  half  assess  that  which  he  really  finds.  Further,  that 
there  are  large  amounts  of  personal  property  which  he  is 
absolutely  incompetent  to  assess.  Consider  for  a moment, 
if  you  will,  what  is  involved  in  the  matter  of  assessing  the 
merchandise  in  a large  city  like  Milwaukee.  Here  is  my 
good  friend  Peck,  one  of  the  ablest  men  I know.  Sup- 
pose that  he  was  called  upon  to  assess  a stock  of  fancy  goods 
in  one  store,  a stock  of  dry  goods  in  another,  a stock  of 
jewelry  in  another,  a stock  of  hardware  in  another,  and 
various  stocks  of  clothing,  shoes,  harnesses,  books  and  pict- 
ures in  succession.  How,  suppose  that  he  has  to  pass  from 
one  of  those  stores  to  another  within  the  time  allowed  the 
local  assessor  to  make  the  assessment,  and  what  kind  of  an 
assessment  would  we  get?  What  would  it  be  worth  as  in- 
dicating the  value  of  the  property? 

Doubtless  it  would  be  a great  improvement  on  what  is 
ordinarily  secured  because  it  would  represent  the  judgment 
of  a man  of  rare  ability  and  great  experience.  But  unless 
he  had  been  specially  and  divinely  endowed  for  that  pur- 
pose, even  he  could  not  make  a fair  assessment  of  such 
varied  and  miscellaneous  properties. 

It  is  absolutely  impossible  for  any  one  man  to  have  the 


34 


knowledge  which  will  enable  him  to  do  that  work.  Put 
every  man  in  this  room,  including  the  members  of  the  Board 
of  Assessment,  on  a commission  to  tell  what  is  the  value  of  a 
well  appointed  jewelry  store,  and  would  an  intending  pur- 
chaser give  a fig  for  their  combined  judgment  as  to  its  value  ? 
But  we  are  often  asking  of  a man  who  has  not  a tithe  of  Mr. 
Peck’s  ability  and  experience,  not  only  to  do  all  that  I have 
suggested  in  my  supposititious  case,  but  also  to  fix  the  value 
of  all  other  kinds  of. personal  property  in  our  largest  cities. 
The  results  of  such  an  assessment  are  too  farcical  to  com- 
mand any  kind  of  consideration  except  for  the  reason  that 
the  law  requires  that  we  shall  consider  them. 

But  let  it  also  be  remembered  that  to  a very  large  extent  the 
men  who  own  this  personal  property,  also  own  the  real  estate. 
Of  course  this  will  not  invariably  be  the  case,  but  to  a very 
large  extent  it  will  be  true,  and  it  will  be  particularly  true 
in  the  rural  districts.  The  men  whose  horses  and  hogs, 
carriages  and  watches,  escape  assessment,  whose  moneys  and 
credits,  whose  grain  and  other  farm  products,  whose  stocks, 
money  and  securities,  all  fail  of  assessment — they  are  the 
very  men  who  own  the  land  with  the  value  of  which,  rail- 
road assessments  are  being  compared.  A method  has  been 
adopted  by  the  legislature  which  drags  to  the  front  and  into 
notice,  so  far  as  railroad  property  is  concerned,  every  nail, 
every  bolt  and  tie.  The  various  railway  companies  have 
spent  months  of  time  and  thousands  of  dollars  in  money  in 
the  preparation  of  a report  for  this  Board,  which  shows  in 
the  minutest  detail  the  physical  condition  of  all  their  prop- 
erties. Nothing  has  been  left  out.  If  the  Board  have  ac- 
complished what  they  set  out  to  accomplish,  and  what  they 
had  a right  to  accomplish,  there  isn’t  a scrap  of 
paper  in  the  office  of  any  railroad  company,  the 
value  of  which  has  not  been  brought  under  the 


35 


surveillance  of  their  judgment  and  knowledge  for 
the  purpose  of  assessment.  When  the  value  of  that  prop- 
erty has  been  thus  disclosed  even  to  the  uttermost  farth- 
ing, the  rate  at  which  it  is  to  be  taxed  is  to  be  determined 
by  ascertaining  a rate  paid  by  taxpayers  who  escape  an 
assessment  on  a large  proportion  (perhaps  one-half)  of  their 
holdings. 

And  by  just  so  much  as  their  property  fails  to  be  assessed 
and  taxed,  is  the  railway  property  unjustly  burdened. 

It  was  said  by  the  Tax  Commission  in  one  of  its  reports, 
without  absolutely  endorsing  the  proposition  or  expressing 
an  absolute  opinion  of  its  correctness,  that  they  were  at  least 
favorably  impressed  by  the  claim  of  economists  that  in  a 
state  like  Wisconsin,  the  personal  property  of  the  taxpayers 
is  more  than  equal  in  value  to  the  real  property. 

Mr.  Baldwin:  I don’t  think  they  went  that  far. 

Mr.  Crandon:  I said  I didn’t  think  they  affirmatively 

adopted  that  view,  but  that  they  inclined  to  it. 

Mr.  Peck:  They  said — without  expressing  themselves — 

they  did  state  that  it  was  the  opinion  of  well  informed 
economists  that  that  was  so. 

Mr.  Curtis:  Didn’t  they  refer  to  that  opinion  and  say 

they  regarded  it  as  a proposition  not  proven  ? 

Mr.  Peck:  !No,  sir;  you  remember  you  and  I had  a dis^ 

pute  about  that  and  I introduced  the  record.  You  said 
you  didn’t  say  it,  and  then  I read  it  to  you.  Don’t  you  re- 
member that,  Mr.  Curtis  ? 

Mr.  Curtis:  Mo. 

Mr.  Peck:  They  didn’t  say  in  so  many  words  that  they 

approved  it,  but  they  certainly  didn’t  disapprove  it,  and 


36 


they  stated  it  as  an  opinion  of  the  best  informed,  or  well  in- 
formed, economists. 

Mr.  Crandon:  Well,  we  have  now  a reported  assessment 

of  this  property  of  Wisconsin  for  the  year  1903.  That  as- 
sessment made  by  the  local  assessors  fixes  the  value  of  the 
real  estate  at  $1,120,086,060.  The  assessment  of  the  per- 
sonal property  amounts  to  $238,058,056.  How  does  that 
square  with  any  theory  of  the  economists,  or  of  the  Board, 
or  of  anybody  else  ? Don’t  the  assessors  know  that  it  is  a 
farce?  Don’t  you  know  it,  and  don’t  I know  it,  and  don’t 
everybody  know  it  ? As  already  stated  this  personal  prop- 
erty is  owned  hv  the  men  who  also  pay  the  real  estate  tax, 
and  when  you  are  finding  the  rate  of  taxation  on  the  general 
property  of  the  state  in  order  to  determine  a rate  which  is 
to  be  applied  to  whatever  assessment  you  place  upon  the  rail- 
road property,  you  should  do  whatever  you  legally  and  prop- 
erly may  do — I don’t  know  how  much  that  may  he — but 
it  ought  to  include  everything  that  by  a liberal  construction 
of  the  statute  you  are  authorized  to  do — to  introduce  into 
that  problem  the  values  of  the  personal  property  which  is 
escaping  taxation,  and  is  thereby  adding  unfairly  to  the  rate 
of  taxation  which  is  placed  upon  railway  property. 

I do  not  want  to  take  your  time  much,  if  any  farther.  I 
appreciate  the  difficulties  of  the  problem  with  which  you 
have  to  deal,  and  I appreciate  the  courtesy  that  has  been  ex- 
tended to  our  Committee  by  this  Board.  I have  an  abiding 
faith  that  the  Board  of  Assessment  earnestly  desires  to  se- 
cure equitable  results  and  I believe  that  the  Board  has  found 
that  our  Committee  is  anxious  to  aid  in  working  out  the 
problem  fairly.  Before  making  way  for  Mr.  Dudley,  who 
has  some  important  statistics  and  suggestions  to  present,  I 
submit  an  estimate  of  the  actual  value  of  the  general  prop- 
erty of  the  state. 


37 


It  has  already  been  shown  that  the  local  assessment  in 
Milwaukee  County  ought  to  be  increased  at  least  100  per 
cent,  in  order  to  make  it  equal  to  the  real  value  of  the  prop- 
erty. 

Mr.  Brown,  who  has  just  finished  an  investigation  of  the 
ratio  between  assessment  and  real  values  in  Racine  and 
Ozaukee  Counties,  reports  that  the  same  ratio  between  values 
exists  in  those  localities,  and  the  reason  for  estimating  the 
assessment  of  the  remainder  of  the  state  at  not  more  than 
66  2/3  per  cent,  of  real  value,  has  been  stated.  These  are 
the  bases  of  the  following: 


Estimate. 

LOCALITY.  LOCAL  ADD  TO  REAL  VALUE. 

ASSESSMENT.  MAKE  FULL 

VALUE. 

Milwaukee  Co  . . $173,577,574  100$  $347,155,148 

Racine  Co 26,610,098  100$  53,220,196 

Ozaukee  Co 13,316,328  100$  26,632,656 

The  State  outside 
of  the  above 

three  counties  . 906,582,060  50$  1,359,873,090 

Personal  property  238,058,056  4 times  952,232,224 


$1,358,144,116  $2,739,113,314 

Chairman  Gilson : Before  you  conclude  I wish  you  would 
refer  specifically  to  those  reports  which  you  desire  to  submit 
so  that  we  may  have  them  entered  on  the  record,  if  you  will. 

Mr.  Crandon:  Suppose  that  at  the  end  of  our  argument 

we  hand  you  a list  of  all  the  reports,  documents  and  tables 
which  we  desire  to  submit,  and  which  we  will  leave  with  you  ? 

Chairman  Gilson : I want  to  inquire  further  in  regard  to 

your  statement  of  the  report  to  you  of  the  commercial  agency, 


38 


or  one  commercial  agency,  of  the  amount  of  merchandise  in 
the  state. 

Mr.  Crandon : Mr.  Baldwin  will  take  that  up  in  detail. 

Mr.  Baldwin : Yes,  I will  submit  that. 

Mr.  Crandon : It  is  suggested  to  me  that  if  you  care  to 

have  Mr.  Brown  speak  in  support  of  his  report,  or  any  analy- 
sis of  it,  or  if  you  would  like  to  ask  him  some  questions, 
this  would  he  a good  time  to  have  him  make  any  statements 
that  the  Board  would  like  to  hear. 

Chairman  Gilson : I don’t  know  as  we  care  for  any  state- 

ment, unless  you  desire  to  have  Mr.  Brown  heard. 

Mr.  Baldwin : I think  it  would  he  desirable  to  have  the 

Board  hear  Mr.  Brown. 

STATEMENT  OF  THOMAS  H.  BROWN  ON  THE  VALUE  OF  THE 

REAL  ESTATE  IN  MILWAUKEE,  OZAUKEE  AND  RACINE  COUN- 
TIES. 

Mr.  Thomas  IX.  Brown:  I do  not  think  I can  say  any- 

thing that  will  add  one  word  to  my  report. 

Mr.  Bowers:  You  can  state  the  result  of  your  methods, 

in  short,  which  will  help  the  consideration  of  your  report 
later. 

Mr.  Brown:  I can  tell  you  just  exactly  what  I did.  The 
first  thing  I did  was  to  go  to  the  county  clerk  of  Milwaukee 
County  and  make  a copy  of  the  report  for  the  year  ending 
September  1,  1903,  of  the  sales  reported  by  the  register  of 
deeds  of  that  county  to  the  secretary  of  state. 

Mr.  Baldwin : As  this  goes  into  the  record,  would  it  not 

be  proper  to  have  also  in  the  record  a brief  statement  of  Mr. 
Brown’s  occupation,  and  how  he  came  to  take  this  up  ? I 


39 


should  like  to  have  him  state  that  fact,  so  that  it  will  be  in 
the  record.  Will  you  state,  Mr.  Brown,  what  your  occupa- 
tion is,  and  what  your  means  of  familiarity  with  this  ques- 
tion are,  so  as  to  have  it  in  the  record? 

Mr.  Brown:  For  the  nine  years  preceding  January  1, 

1903,  I was  the  tax  commissioner  of  the  City  of  Milwaukee; 
since  that  time  I have  employed  my  time  as  a counsellor  in 
tax  matters ; and  for  that  reason  I suppose  I was  called  upon 
by  the  railroad  officials. 

Mr.  Baldwin:  Will  you  please  state  how  you  came  to 

take  this  subject  up,  and  what  the  instructions  or  suggestions 
were,  made  to  you,  as  to  what  was  desired  to  be  accomplished 
by  your  investigation  ? 

Mr.  Brown:  I was  simply  asked  by  the  railroad  officials 

to  make  an  investigation  of  that  report;  to  investigate  that 
report,  and  ascertain  how  much  truth  there  was  in  it;  to 
dissect  it,  to  analyze  it. 

Mr.  Baldwin : Made  by  the  register  of  deeds  to  the  secre- 
tary of  state.  As  I said,  I made  a copy  of  that  report,  upon 
blanks  which  I had  printed,  which  enabled  me  to  insert  the 
name  of  the  grantor  and  the  grantee  ; and  then  we  had  a 
wide  margin  for  remarks.  I went  to  the  register  of  deeds’ 
office  and  read  over  every  deed ; and  made  a memorandum  on 
the  margin  wherever  the  deed  itself  showed  that  the  consid- 
eration was  not  the  full  consideration ; when  it  was  made  sub- 
ject to  some  agreement,  or  some  condition,  or  some  lease,  or 
some  other  consideration.  I made  a memorandum  of  all  of 
those  things ; and  then,  as  far  as  possible  and  in  nearly  every 
case,  saw  the  grantor  and  the  grantee,  and  asked  them  ques- 
tions, ascertained  the  facts.  Having  obtained  all  this  infor- 
mation I made  a record  of  it  on  the  margin  of  this  report. 


40 


This  report  shows  all  that  I know  about  the  matter.  From 
memory  I cannot  tell  you  as  to  any  particular  piece,  without 
referring  to  the  report  ; and  I don’t  remember  the  total  re- 
sults either. 

Mr.  Baldwin:  Mr.  Brown,  how  many  assessments  are 

there  in  the  City  of  Milwaukee  ? 

Mr.  Curtis : Of  real  estate,  you  mean  ? 

Mr.  Baldwin : Of  real  estate,  yes. 

Mr.  Brown:  Well,  here  is  the  total  result.  The  number 

of  sales  for  the  year  ending  September  1,  1903,  as  reported 
by  the  register  of  deeds,  1,105.  Total  consideration  in  deeds 
as  reported  by  the  register  of  deeds,  $2,695,333.31. 

Mr.  Curtis : That  relates  to  the  city  alone  ? 

Mr.  Brown:  The  whole  county. 

Mr.  Curtis : Of  Milwaukee  ? 

Mr.  Brown:  Yes.  Total  assessed  value  of  the  real  es- 

tate, sold,  including  buildings,  as  per  last  tax  roll  as  reported 
by  the  register  of  deeds,  $1,773,918. 

Total  number  of  sales  for  the  year  ending  September  1, 
1903,  4,480.  Total  number  of  sales  for  the  year  ending 
September  1,  1903,  which  appear  to  have  been  made  under 
ordinary  conditions,  in  the  usual  course  of  business,  for  a 
consideration  expressed  wholly  in  money,  573.  Total  num- 
ber of  sales  for  the  year  ending  September  1,  1903,  which 
appear  to  have  been  made  under  ordinary  conditions  in  the 
usual  course  of  business  for  a consideration  expressed  wholly 
in  money,  and  where  the  conditions  at  the  time  of  sale  were 
the  same  as  at  the  time  the  assessment  was  made,  512.  Num- 
ber of  real  estate  assessments  119,819.  Total  consideration 
of  properties  reported  sold,  where  the  conditions  at  the  time 


41 


of  sale  were  the  same  as  at  the  time  the  assessment  was  made, 
and  which  sales  appear  to  have  been  made  under  ordinary 
conditions,  in  the  usual  course  of  business,  for  a considera- 
tion expressed  wholly  in  money,  $1,025,194.  Total  assess- 
ment for  1902  of  properties  reported  sold  where  the  condi- 
tions at  the  time  of  sale  were  the  same  as  at  the  time  the 
assessment  was  made,  which  sales  appear  to  have  been  made 
under  ordinary  conditions,  in  the  usual  course  of  business, 
for  a consideration  expressed  wholly  in  money,  $502,950. 
Total  assessment  for  1903  of  properties  reported  sold,  where 
the  conditions  at  the  time  of  sale  were  the  same  as  at  the 
time  the  assessment  was  made,  which  sales  appear  to  have 
been  made  under  ordinary  conditions,  in  the  usual  course  of 
business  for  a consideration  expressed  wholly  in  money 
$517,085. 

Total  assessed  valuation  of  real  estate  in  1902,  $167,- 
692,874.  Total  assessed  valuation  of  personal  property  in 
1902,  $36,481,710.  Total  assessed  valuation  of  real  and 
personal  property  in  1902,  $204,174,584.  Total  assessed 
valuation  of  real  estate  in  1903,  $173,577,274. 

Total  assessed  valuation  of  personal  property  in  1903, 
$39,593,495.  Total  assessed  valuation  of  real  and  personal 
property  in  1903,  $213,171,069.  Average  percentage  of 
actual  values  at  which  assessment  was  made,  as  shown  by  the 
report  of  register  of  deeds,  59.86. 

Chairman  Gilson:  Would  that  embrace  the  properties, 

the  500  sales,  you  examined,  or  a little  over? 

Mr.  Brown:  No;  that  is  as  shown  by  the  register  of 

deeds. 

Mr.  Haugen : That  is  before  you  made  the  eliminations  ? 

Mr.  Brown:  Yes.  What  the  actual  value  of  the  assessed 


42 


property  would  be,  measured  by  the  percentage  shown  by 
the  report,  $356,221,778.  The  average  percentage  of  actual 
values  at  which  assessments  are  made,  as  shown  by  the  re- 
vised report  of  the  register  of  deeds,  49.37,  but  the  actual 
value  of  the  assessed  property  would  be  measured  by  the  per- 
centage established  by  the  revised  report  of  the  register  of 
deeds,  $431,722,638. 

Chairman  Gilson:  Is  that  of  the  County  of  Milwaukee? 

Mr.  Brown:  The  entire  county. 

Chairman  Gilson:  Have  you  the  separate  valuation  of 

the  city  ? 

Mr.  Brown : Every  ward ; every  assessment  district ; right 
here. 

Mr.  Baldwin:  I would  like,  if  Mr.  Brown  can,  by  refer- 
ring to  instances,  to  have  him  illustrate  the  method 
which  he  has  adopted ; give  illustrations  of  the  way  he  has 
in  certain  cases  said  such  a report  he  would  reject,  and  an- 
other one  he  would  accept.  Of  course  he  couldn’t  go  into  that 
in  detail,  but  just  enough  to  illustrate,  so  that  you  may  get 
an  idea  of  the  manner  in  which  he  performed  the  work. 

Mr.  Brown : Mr.  President,  I think  my  report  on 

Ozaukee  County  will  state  it  better  than  I can  give  it  by 
picking  out  instances  in  this  long  report.  The  statement 
of  the  register  of  deeds  of  Ozaukee  County  for  the  year  end- 
ing September  1,  1903,  made  in  compliance  with  the  statute, 
reports  141  sales.  An  examination  of  the  statement,  and 
of  the  records  in  the  office  of  the  register  of  deeds  of  Ozau- 
kee County  shows  that  24  of  those  sales  were  made  and  the 
deeds  of  conveyance  recorded  prior  to  September  1,  1902. 
Your  instructions  were  to  include  deeds  which  were  re- 
corded after,  but  made  subsequent  to  April  30,  1902.  These 
were  all  made  and  recorded  prior  to  September  1,  1902. 


43 


Mr.  Haugen : We  have  tried  to  eliminate  those  convey- 

ances that  did  not  comply  with  our  instructions  when  the 
report  reached  us. 

Mr.  Brown:  I am  simply  showing  what  I eliminated. 

That  is  one  class.  The  examination  shows  that  24  of  those 
sales  were  made,  and  the  deeds  of  conveyance  recorded 
prior  to  September  1,  1902.  That  of  the  remaining  117 
sales,  21  were  made  subject  to  encumbrances  which  the 
grantees  assumed.  That  the  consideration  of  these  21  sales 
given  in  the  register’s  statement  is  $70,112.50.  That  the 
consideration,  including  encumbrances — the  actual  consider- 
ation is — $102,467.50.  That  the  assessed  valuation  of  the 
21  pieces  is  $52,230.  That  11  sales  were  made  for  con- 
siderations not  expressed  wholly  in  money.  That  is  another 
class  that  was  thrown  out.  That  the  description  of  land 
in  one  deed  does  not  tally  with  the  description  in  the  reg- 
ister’s statement.  There  are  several  of  those  in  this  re- 
port. That  20  pieces  of  land  were  sold  each  for  less  than 
the  assessed  valuation,  the  total  consideration  being  $20,- 
124,  and  the  total  assessed  valuation  being  $24,180. 

Mr.  Curtis : Hid  you  exclude  those  ? 

Mr.  Brown:  Ho,  I didn’t  exclude  those,  but  they  ought 

to  have  been  excluded,  because  on  the  face  of  the  returns 
it  appears  that  it  is  not  true  that  10  pieces  of  land  were 
sold  for  exactly  the  assessed  valuation.  Those  were  not 
excluded  either.  That  the  assessed  valuation  of  all  the  prop- 
erty reported  sold  by  the  register  of  deeds  is  79$  of  the 
consideration  by  him  reported;  and  that  the  assessed  valua- 
tion of  the  21  pieces  sold  subject  to  encumbrances  which 
the  grantee  assumed,  is  50$  of  the  actual  consideration. 

The  same  condition  exists  in  Bacine  County. 


44 


Mr.  Polleys:  Did  you  make  any  computation  to  acer- 

tain,  after  your  process  of  elimination,  the  aggregate  realty 
value  of  Ozaukee  County? 

Mr.  Brown : No,  sir.  Here  is  a summary  of  all  of  those 
things. 

Mr.  Baldwin:  In  Ozaukee  County? 

Mr.  Brown:  No;  Milwaukee  County.  In  the  first  column 
is  the  number  of  sales  for  the  year  ending  September  1, 
1903,  as  reported  by  the  register  of  deeds.  Then  the  total 
consideration  in  deeds  as  reported  by  the  register  of  deeds; 
and  then  the  total  assessed  valuation  of  property,  including 
buildings,  as  per  last  tax  roll,  as  reported  by  the  register 
of  deeds.  Total  number  of  sales  ending  September  1,  1903, 
as  reported  by  the  register  of  deeds.  Total  number  for  the 
year  ending  September  1,  1902,  which  appear  to  have  been 
made  for  a consideration  expressed  wholly  in  money.  That 
is,  after  the  corrections  have  been  made.  Total  number 
of  sales  where  the  consideration  at  the  time  of  sale  was  the 
same  as  the  time  the  assessments  were  made.  That  has 
been  referred  to  by  Mr.  Crandon.  There  are  a great  many 
of  them  in  Milwaukee  County,  in  the  City  of  Milwaukee, 
where,  of  course,  the  assessment  reported  was  the  assessment 
of  1902 ; made  in  May  and  June,  1902.  The  property  was 
sold  subsequent  to  September  1,  1902,  after  the  assessment 
was  made;  and  at  the  time  the  sale  was  made  either  a build- 
ing had  been  removed  by  fire,  or  removed  in  some  other 
way,  or  a new  building  had  been  erected,  and  the  sale  was 
made  for  the  property  with  the  new  building,  or  with  the 
old  building  removed. 

Mr.  Curtis:  In  a changed  condition. 

Mr.  Brown : In  a changed  condition,  so  that  the  assessed 

valuation  as  to  those  sales  should  not  be  considered  at  all. 


45 


Mr.  Haugen:  That  would  not  appear  on  the  face  of  the 

deed  ? 

Mr.  Brown:  Ho. 

Mr.  Haugen : You  ascertained  that  by  personal  investi- 

gation ? 

Mr.  Brown : Yes. 

Mr.  Haugen:  You  found  some  cases  where  buildings 

were  destroyed  after  the  1st  day  of  July,  after  the  meeting 
of  the  Board  of  Review,  and  the  land  only  was  sold  ? 

Mr.  Brown : Yes. 

Mr.  Haugen : How  many  of  those  cases  did  you  find  ? 

Mr.  Brown : I can’t  tell  without  counting. 

Mr.  Haugen : Then  you  found  other  instances  of  build- 

ings constructed  after  the  1st  of  July,  and  the  land  sold  is 
with  the  building? 

Mr.  Brown : Yes. 

Mr.  Haugen : And  that  would  increase  the  value  of  the 

property  for  sale,  above  the  assesment  ? 

Mr.  Brown : Yes. 

Mr.  Haugen:  How,  how  did  the  relative  number  of  one 

class  of  cases  compare  with  the  relative  number  of  the  other 
class  of  cases?  Wouldn’t  one  offset  the  other? 

Mr.  Brown:  I couldn’t  answer  that. 

Mr.  Haugen:  Would  there  be  likely  to  be  as  many  or 

more  instances  where  property  was  increased  by  the  con- 
struction of  a dwelling,  than  where  the  building  was  de- 
stroyed ? 

Mr.  Dudley : There  would  be  the  natural  increase  in  the 

value  of  the  land,  anyway. 


46 


Mr.  Haugen:  Mr.  Crandon  spoke  of  cases  where  the 

buildings  were  destroyed  after  the  1st  day  of  July,  or  after 
the  time  of  sitting  of  the  Board  of  Review;  so  that  when 
the  property  was  sold  it  was  sold  for  a less  consideration 
than  the  assessed  valuation.  How,  there  must  be  a number 
of  instances  where  buildings  were  constructed  after  that 
period,  and  the  property  would  be  sold  for  much  more  than 
the  assessed  valuation,  because  it  would  include  the  building. 
I wanted  to  find  out  whether  one  would  not  about  offset  the 
other.  Of  course  we  cannot  tell  anything  from  the  records 
as  to  those  cases. 

Mr.  Brown:  The  law  provides  those  shall  be  excluded 

from  the  report. 

Mr.  Haugen : Yes,  if  the  register  knows  the  facts. 

Mr.  Brown : Yes ; but  he  should  be  provided  with  the 

means  for  ascertaining  the  facts,  before  making  his  report, 
if  the  report  is  to  be  considered  at  all. 

Mr.  Haugen : The  law  has  not  provided  the  means. 

Mr.  Brown : But  you  are  asking  me  to  provide  some- 

thing— 

Mr.  Haugen:  I thought  possibly  you  had  pursued  your 

investigations  to  such  an  extent  that  you  could  tell  how 
many  of  this  class  of  cases  appeared. 

Mr.  Brown:  Ho,  sir.  Here  is  another  class:  Fulfill- 

ment of  land  contract  made  ten  or  twelve  years  ago.  There 
the  price  of  property  was  fixed  at  that  time. 

Chairman  Gilson:  How  many  instances  did  you  find  of 

that  kind  ? 

Mr.  Brown:  A good  many  of  them.  In  fact,  take  the 

over  eight  thousand  sales  made  in  Milwaukee  County  in 


47 


the  year  ending  September  1,  1903,  the  great  majority  of 
them  were  in  fulfillment  of  land  contracts  and  trades. 

The  condition  in  Milwaukee  County  for  the  last  thirteen 
years  has  been  rather  peculiar — or  for  the  last  ten  years, 
if  you  please.  During  1890,  ’91,  ’92  and  part  of  ’93  there 
was  a boom  in  real  estate  in  Milwaukee  County,  and  values 
were  put  up  way  beyond  what  experience  has  taught  us 
could  be  maintained;  and  everybody  that  had  a few  dollars 
surplus  during  those  three  years  invested  it  in  real  estate, 
or  nearly  every  one  of  them.  So  that  in  Milwaukee  city  and 
county  there  were  thousands  of  people  who  had  bought  lots 
here  and  there  all  over  the  city,  and  all  over  the  county; 
bought  tracts  of  land  as  an  investment.  They  hadn’t  money 
enough  to  pay  for  the  investment  at  the  time.  They  bought 
on  credit,  paying  a little  down.  During  the  last  ten  years 
these  people  have  been  getting  tired.  They  have  been  unable 
to  carry  the  load,  and  they  have  been  trading  it  for  this,  that 
and  the  other  thing,  cats  and  dogs,  to  get  rid  of  it,  and  get 
out  from  under  the  load;  sometimes  selling  for  prices  that 
were  half  what  they  paid  for  it  ten  years  ago.  That  has 
been  the  condition  in  the  City  of  Milwaukee.  I think  they 
have  just  about  unloaded  all  that  sort  of  property.  I think 
now  it  is  in  a healthy  condition.  But  for  the  last  ten  years 
it  has  been  a very  difficult  matter  to  tell  what  property  was 
worth  in  Milwaukee.  Of  course  there  are  some  locations, 
like  the  corner  of  East  Water  and  Wisconsin  streets,  and 
West  Water  and  Grand  avenue,  and  up  on  Prospect  avenue, 
a residence  district,  and  over  on  National  avenue  and  First 
avenue — some  few  localities  that  you  can  pick  out  where 
property  has  appreciated  very  materially  in  value;  but  it 
is  not  true  of  the  city  as  a whole. 

Mr.  Haugen : The  last  assessment  made  under  your 


48 


supervision  as  tax  commissioner  of  Milwaukee  was  made  in 
1902? 

Mr.  Brown:  The  assessment  was  made  in  1902,  and  I 

was  tax  commissioner. 

Mr.  Haugen : That  was  the  last  made  under  your  direc- 

tion. What  was  the  total  valuation  of  the  city  at  that  time 
as  found  by  you — of  the  real  estate,  say,  first  ? 

Mr.  Brown : The  total  assessed  valuation  of  real  estate  ? 

Mr.  Haugen:  Yes. 

Mr.  Brown : Ho  you  mean  the  City  of  Milwaukee  ? 

Mr.  Haugen : The  City  of  Milwaukee,  under  the  last  as- 

sessment made  by  you,  in  1902. 

Mr.  Polleys:  I have  the  1902  assessment  of  Milwaukee 

realty. 

Mr.  Haugen : That  is,  of  the  city. 

Mr.  Polleys:  I have  it  here,  quoted  from  the  regular 

abstract  of  assessment  in  the  Secretary  of  State’s  office : 
“$146,730,320.” 

Mr.  Haugen  : And  the  personal  property  ? 

Mr.  Polleys:  The  personal  property  I have  not. 

Mr.  Haugen : What  have  you  for  the  county,  Mr.  Tol- 

leys ; the  local  assessment  ? 

Mr.  Polleys : The  local  assessment  I have  of  the  county, 

outside  of  Milwaukee,  was  twenty  million. 

Mr.  Baldwin : Mr.  Brown,  as  an  expert,  based  upon 

your  experience  in  these  examinations  which  you  have  made 
in  Milwaukee  County,  and  these  other  counties,  what  if  any 
accuracy  can  he  attributed  to  the  percentages  of  assessment  to 
true  value,  derived  from  the  report  to  the  Secretary  of 
State  by  the  Register  of  Deeds  ? 


49 


Mr.  Brown:  My  own  idea,  from  my  experience,  is  that 

they  are  of  very  little  if  any  value.  The  Register  of  Deeds 
of  Milwaukee  County  said  to  me  last  week  that  the  report 
was  a farce.  Here  is  another  class,  special  guardian  deed. 

Mr.  Haugen:  That  ought  to  he  excluded.  How  many 

were  included  of  those? 

Mr.  Brown : I can’t  tell  you ; hut  the  report  shows  ex- 

actly just  why  each  one  should  he  excluded.  The  law  pro- 
vides it,  and  I have  followed  the  law  exclusively. 

Chairman  Gilson : In  the  report  do  you  give  the  name  of 
the  grantee  and  the  grantor  in  the  conveyances  ? 

Mr.  Brown:  Ho;  I recopied  this  on  another  blank. 

Chairman  Gilson:  I wanted  to  know  whether  this  report 

would  contain  the  names  of  the  grantor  and  grantee,  for  in- 
vestigation if  it  was  desired  to  make  it. 

Mr.  Brown : Ho ; but  I can  give  that  to  you.  I have 

that  at  my  office  at  home.  Well,  I have  got  each  ward  by 
itself.  Each  assessment  district  by  itself. 

Mr.  Haugen : You  have  not  summed  up  the  City  of  Mil- 
waukee, from  the  rest  of  the  county? 

Mr.  Brown:  Yes. 

Mr.  Crandon : Mr.  Dudley  has  analyzed  that  whole  matter 
in  his  brief,  about  these  facts  that  are  being  inquired  of,  as 
to  the  values  of  different  locations ; different  specific  tracts 
or  districts,  which  will  be  all  brought  out  in  perfect  detail 
by  Mr.  Dudley  when  he  makes  his  presentation. 

Mr.  Brown : Then  I perhaps  better  take  my  seat  until 

you  want  to  ask  me  some  questions  later  on. 

Mr.  Curtis:  Just  one  question,  Mr.  Brown,  while  you  are 
on  your  feet:  These  investigations  of  the  Register’s  records 

were  conducted  by  you  personally  ? 


50 


Mr.  Brown:  Yes.  Of  course  I had  help.  I never  could 
have  done  it  alone. 

Mr.  Curtis:  But  you  were  giving  active  attention  to  just 

what  was  going  on  ? 

Mr.  Brown : All  the  time,  yes,  sir. 

Mr.  Curtis:  The  investigation  of  conditions  outside  of 

the  record,  such  inquiries  as  you  had  to  pursue  with  the 
parties  to  the  conveyances,  those  were  conducted  by  you  in 
part  personally,  and  in  part  by  assistants,  I suppose  ? 

Mr.  Brown : Yes. 

Mr.  Curtis : Roughly,  what  proportion  were  you  able  to 

conduct  personally? 

Mr.  Brown:  Well,  so  far  as  the  compilation  of  the  re- 

port is  concerned,  I did  that  all  myself. 

Mr.  Curtis  : Your  outside  investigations,  how  much  of 

that  were  you  able  to  conduct  personally — speaking  roughly  ? 

Mr.  Brown : Oh,  perhaps  25^  of  it. 

Mr.  Curtis:  The  examination  of  properties  to  determine 

whether  there  was  any  change  in  conditions  since  the  as- 
sessment, were  those  examinations  conducted  by  you  per- 
sonally in  whole  or  in  part  ? 

Mr.  Brown:  Yes,  through  the  assessors.  I went  right 

to  the  records,  and  got  that  from  the  assessment  roll.  The 
assessment  roll  of  1902,  would  show  a vacant  property,  if 
you  please,  and  the  assessment  of  1903,  would  show  a build- 
ing on  that  property. 

Mr.  Curtis:  You  ascertained  then  by  a comparison  of 

the  data  appearing  upon  the  roll  ? 

Mr.  Brown:  Yes;  and  by  asking  the  assessor  about  the 

facts  in  the  matter. 


51 


Mr.  Haugen : Then  you  would  have  to  inquire  further, 

as  to  whether  the  building  was  constructed  before  or  after 
the  time  of  the  sale  ? 

Mr.  Brown : Yes.  That  appears  upon  the  books  of  the 

assessor. 

Mr.  Haugen : Ho,  that  wouldn’t  appear  upon  the  books 

of  the  assessor. 

Mr.  Brown:  Well,  the  books  of  the  assessor  of  the  City 

of  Milwaukee,  I am  talking  about. 

Mr.  Haugen : The  books  of  the  assessor  would  show  there 

was  no  building  on  the  premises  in  1902,  but  there  was  in 
1903.  But,  a sale  was  made,  say  in  December,  1902 ; 
whether  or  not  the  building  was  constructed  before  or  after 
the  time  the  sale  was  made  in  December  would  not  appear, 
would  it  % 

Mr.  Brown:  The  assessors  of  the  City  of  Milwaukee, 

each  one  has  a plat  book.  On  a page  is  every  block,  and 
that  is  of  sufficient  size  so  that  the  size  of  each  parcel,  each 
lot  or  part  of  a lot,  is  noted  on  that  book.  On  the  lot  side 
of  it  he  puts  down  the  building.  Outside  he  puts  down  the 
value  of  the  lot,  and  the  date  when  he  makes  it;  and  he 
notes  when  there  has  been  a change  by  removing  a build- 
ing ; when  there  has  been  a new  building  constructed  he  notes 
that,  and  puts  down  the  date,  so  that  there  is  no  guess  work 
about  it. 

Mr.  Haugen : The  date  of  the  completion  of  the  build- 

ing? 

Mr.  Brown : Yes.  And  when  he  makes  his  assessment 

you  will  see  frequently  upon  the  assessment  roll  the  words 
“incomplete”  or  “unfinished.”  He  assesses  a building  half 
finished,  if  you  please. 


52 


Mr.  Haugen : But,  if  the  building  was  completed  in  De- 

cember, remote  from  the  time  of  assessment,  does  he  indi- 
cate that  on  his  plat,  that  it  is  completed  in  December  ? 

Mr.  Brown:  Ho. 

Mr.  Haugen:  He  only  indicates  whether  completed  or 

not  at  the  time  of  the  assessment? 

Mr.  Brown:  Yes. 

Mr.  Haugen : Then  there  would  not  be  anything  to  show 

on  the  record,  if  the  sale  was  made  in  December,  whether 
or  not  at  that  time  a building  which  was  not  on  the  premises 
at  the  previous  assessment  had  been  completed ; they  wouldn’t 
be  able  to  show  that  ? 

Mr.  Brown : I don’t  know  as  I understand. 

Mr.  Haugen : A sale  is  made  of  a piece  of  land  in  Decem- 
ber, 1902,  and  at  the  time  of  the  assessment  in  1902,  that  was 
vacant.  At  the  time  of  the  assessment  in  1903,  there  was  a 
building  upon  it ; whether  or  not  that  building  was  completed 
before  or  after  the  time  the  sale  was  made  in  December  would 
not  appear. 

Mr.  Brown:  Ho,  that  would  not  appear  upon  the  books. 

But  the  fact  that  a lot  was  assessed  in  1902,  at  a thousand 
dollars,  and  the  next  year  at  three  thousand  dollars,  would 
indicate  to  me  that  some  change  had  taken  place  in  that 
property,  and  I would  investigate  it,  and  find  out. 

Chairman  Gilson : Mr.  Dudley,  you  have  submitted  here 

Mr.  Brown’s  valuation  of  the  specific  pieces  of  property  and 
conveyances  which  he  considers  proper  to  be  considered  in 
ascertaining  the  value  in  Milwaukee  city  and  county.  He 
took  the  register’s  return  to  the  Secretary  of  State  for  the 
year  1903,  for  the  basis  of  his  work. 

Mr.  Dudley:  Yes. 


53 


Mr.  Gilson : And  he  then  proceeded  to  make  certain 

eliminations. 

Mr.  Dudley:  Yes. 

Chairman  Gilson : Can  you  furnish  us  with  a copy  of 

the  register’s  report,  showing  the  eliminations  which  he  made  ? 

Mr.  Dudley:  The  whole  thing  is  there. 

Mr.  Curtis:  Will  the  document  there  indicate  which 

items  were  and  which  were  not  included  in  his  final  calcu- 
ation  ? 

Mr.  Dudley:  Yes. 

Chairman  Gilson : Does  it  indicate,  so  that  in  taking  up 

the  report  we  can  ascertain  what  conveyances  were  excluded, 
and  what  included  in  this  ? 

Mr.  Dudley:  Yes.  This  is  shown  hv  assessment  dis- 

tricts. 

Statement  of  A.  S.  Dudley  on  The  Value  of  the  Real 
and  Personal  Property  in  Wisconsin  Sub- 
ject to  Taxation. 

Mr.  A.  S.  Dudley:  Mr.  Chairman,  and  gentlemen. — I 

really  don’t  know  that  I have  anything  to  submit  additional 
to  what  has  already  been  presented  to  you.  I think  that 
what  I have  here  committed  to  writing  will,  however,  serve 
as  a partial  recapitulation,  perhaps,  of  what  has  been  pre- 
sented to  you  by  Mr.  Crandon  and  Mr.  Brown. 

The  law,  the  practical  administration  of  which  is  now 
under  consideration,  was  passed  by  the  last  legislature  for 
the  avowed  purpose  of  taxing  railroad  property  uniformly 
and  equitably  as  compared  with  the  taxation  of  other  classes 
of  property.  The  method  prescribed  by  the  statute  for  se- 


54 


curing  this  uniformity  consists  in  ascertaining  the  true  value 
of  the  railroad  property,  and  the  application  to  that  valuation 
of  the  average  rate  of  taxation  which  is  sustained  by  the 
general  property  of  the  state.  The  average  rate  is  to  be 
determined  by  dividing  the  total  taxes  paid  by  the  general 
property  by  the  true  value  of  such  property.  The  true 
value  of  the  general  property  is  the  subject  with  which  we 
now  have  to  deal. 

Values  fluctuate  from  year  to  year  and  in  a growing  com- 
monwealth there  is  a steady  enhancement  in  the  value  of 
lands  and  a constant  increase  in  the  value  and  quantity  of 
improvements  and  personal  property.  The  question  is  there- 
fore material,  “as  of  what  date  is  the  general  property  of 
the  state  to  be  valued  V ’ It  is  evident,  I think,  that  the  rail- 
road property  must  be  valued  as  of  the  same  date  as  the 
general  property.  If  two  men  have  property  of  equal  pres- 
ent value  it  would  be  manifestly  unjust  to  tax  the  property 
of  one  upon  its  value  now  and  the  property  of  the  other  on 
the  greater  or  less  valuation  which  it  had  at  some  former 
period. 

The  assessment  of  1903  of  general  property  was  made 
last  May  and  June.  Railroad  property  was  exempt  from 
assessment  at  that  time  because  it  paid  in  lieu  of  taxes  of 
1903  a license  fee.  The  statute  calls  the  assessment  of  rail- 
roads about  to  be  made  the  “Assessment  of  1904”;  but  it 
is  evident  that  this  assessment  can  not  be  compared  with 
the  general  property  assessment  of  1904,  which  has  not  been 
made,  nor  can  this  railroad  assessment  of  1904,  which  un- 
der the  theory  of  the  law  is  made  in  1903,  be  regarded  as 
covering  the  property  owned  by  the  railroad  company  on 
May  1,  1904.  It  seems,  therefore,  that  what  the  law  terms 
the  railroad  assessment  of  1904  means  merely  the  entire 


55 


process  of  levying  upon  railroads  the  taxes  which  are  to  be 
paid  in  the  year  1904;  and  the  date  as  of  which  railroads 
are  to  be  valued  in  order  to  secure  any  semblance  of  uni- 
formity must  he  the  date  of  the  general  property  assess- 
ment of  1903. 

That  a comparison  or  equalization  of  the  value  of  rail- 
road and  general  property  is  to  be  made  with  reference  to 
their  respective  values  at  the  date  of  the  general  assess- 
ment of  1903,  is  further  evidenced  by  considering  the  method 
prescribed  by  the  statute  for  computing  the  average  rate. 
Section  9 provides  that,  “The  board  not  later  than  the  first 
day  of  November  in  each  year  * * * shall^  according 

to  their  best  knowledge  and  judgment,  ascertain  and  deter- 
mine the  true  cash  value  of  all  the  general  property  of  the 
state  assessed  and  to  be  taxed  in  the  then  present  year  ” 
Section  11  provides  for  the  ascertainment  of  the  aggregate 
of  state  and  local  taxes  of  the  same  year,  and  section  14  pro- 
vides that,  “From  the  aggregate  true  cash  value  of  the 
general  property  of  the  state  and  the  aggregate  of  taxes  so 
determined  and  entered  on  the  records  the  board  shall  com- 
pute and  determine  the  average  rate  of  taxation.”  The 
problem,  therefore,  is  to  determine  the  true  cash  value  in 
May,  1903,  of  the  general  property  of  the  state  which  sus- 
tained the  general  taxes  of  1903. 

That  the  local  assessment  of  1903  does  not  represent 
true  value  is  admitted,  but  the  magnitude  of  the  task  and 
the  practical  impossibility  of  making  a re-appraisal  as  of 
May,  1903,  and  the  absence  of  other  data,  compel  us  to  give 
greater  consideration  to  the  reports  of  local  assessors  than 
they  would  otherwise  deserve. 

We  believe  that  the  value  of  property  in  1903  cannot 
be  determined  by  a consideration  of  the  average  values  of 


56 


the  same  or  other  property  during  the  previous  five  or  seven 
years.  We  contend  that  the  application  of  an  average  ratio 
existing  between  assessed  and  true  value  during  a period 
of  five  years  (assuming  that  such  ratio  has  been  accurately 
obtained)  to  the  average  assessed  value  of  the  same  years 
cannot  result  in  giving  the  true  value  of  property  at  any- 
particular  time.  The  present  actual  value  would  necessar- 
ily exceed  such  an  hypothetical  true  value  based  on  an 
average  of  the  values  of  past  years  for  the  reason  that  as 
a whole  lands  and  town  and  city  lots  have  year  by  year  ap- 
preciated in  value.  Any  so-called  “Average  value”  must, 
therefore,  be  less  than  the  present  value.  The  theory  of 
taking  an  average  value  of  several  years  would  possibly  have 
more  to  commend  it  if  such  average  value  were  to  he  divided 
into  the  average  taxes  paid  during  the  same  years  to  fix  the 
average  rate.  But  to  divide  the  general  property  taxes  of 
1903  by  any  such  average  true  value  would  neither  be  just 
to  the  railroads  nor  comply  with  the  law  which  requires 
that  the  taxes  be  divided  by  the  true  cash  value  of  the  gen- 
eral property  of  the  state  upon  which  said  taxes  were  levied. 
We  believe  that  in  the  determination  of  the  true  value  of  gen- 
eral property  for  any  particular  year  that  no  other  assess- 
ment roll  or  ratio  of  assessment  should  he  considered  than 
the  assessment  roll  of  that  particular  year  and  the  ratio 
between  assessed  and  true  value  which  was  employed  by 
the  assessor  at  that  time.  We  have  only  to  do  with  the  gen- 
eral property  of  1903,  and  the  general  property  of  no  other- 
year  is  identical  with  it. 

The  ratio  between  assessed  and  true  value  used  in  mak- 
ing the  rolls  of  1903  cannot  be  ascertained  by  reference 
to  the  reports  of  registers  of  deeds  transmitted  to  the  Sec- 
retary of  State  under  Sec.  1007,  as  amended  by  the  laws  of 


57 


1903,  for  the  reason  that  the  sale  price  is  compared  with 
the  assessment  of  1902,  giving  the  ratio  used  in  1902,  and 
in  considering  the  assessment  roll  of  1903  it  is  immaterial 
what  ratio  was  used  in  1902.  But  even  assuming  the  gen- 
eral property  of  1902  and  1903  to  be  identical  in  quantity 
and  actual  value,  so  that  if  the  actual  value  of  the  general 
property  of  1902  were  ascertained  the  same  figure  might 
he  used  for  the  actual  value  of  the  general  property  of  1903, 
we  are  still  of  opinion  that  the  ratio  shown  by  the  figures 
reported  by  the  registers  of  deeds  is  of  little  value.  And 
this  opinion  is  based  upon  a careful  investigation  of  the 
report  of  the  register  of  deeds  of  Milwaukee  County  and 
upon  such  other  investigation  as  we  have  been  able  to  make 
in  two  adjoining  counties. 

The  register  of  deeds  of  Milwaukee  County  for  the 
year  ending  September  1,  1903,  reported  1105  deeds  un- 
der the  law  referred  to.  The  total  consideration  in  these 
deeds  was  $2,695,331,  and  the  assessed  value  of  1902  as 
reported  by  the  register  was  $1,773,918,  giving  a ratio  of 
65.81$. 

Mr.  Brown’s  figures  and  mine  do  not  exactly  agree.  In 
the  figures  which  he  has  given  the  value  of  each  ward  was 
computed  separately,  and  the  total  valuation  of  the  wards 
added  together,  to  get  the  true  value  of  all  the  property  in  the 
city.  But  we  thought  it  reasonable  to  consider  the  city  as  a 
whole.  I have  taken  the  sum  of  the  considerations  in  the 
336  deeds,  or  whatever  the  number  was,  and  their  assess- 
ment to  secure  a ratio  of  assessed  to  true  value  for  the  entire 
city.  In  other  words,  Mr.  Brown’s  figures  are  based  on  a 
consideration  of  the  ward  as  the  unit,  while  I have  treated 
the  city  as  the  unit. 

Chairman  Gilson:  Have  you  computed  the  valuation  on 

the  assessment  of  1902  ? 


58 


Mr.  Dudley:  1903.  We  have  tried  to  find  as  nearly  as 
possible  the  true  value  of  the  property  as  near  the  date  of 
assessment  of  1903  as  possible.  The  Appraisal  Company 
was  instructed  to  get  the  value  as  of  May  1,  1903.  Then  if 
we  get  the  assessed  value  at  the  same  date  we  have  a ratio  we 
thought  would  be  of  value. 

Chairman  Gilson : The  sales,  many  of  them,  perhaps 

half  of  them,  would  he  as  near  May  1,  1902  as  1903,  would 
they  not — the  date  of  the  sales  ? 

Mr.  George  R.  Peck:  Reported  the  1st  of  September. 

Mr.  Haugen : But  the  sales  reported  commence  on  the 

first  of  May,  1902. 

Mr.  Dudley:  Hot  under  the  law. 

Mr.  ITaugan : Under  our  instructions.  That  is,  we  ask 

them  to  report  all  sales  made  after  the  1st  day  of  May  of 
the  preceeding  year,  but  not  recorded  until  after  the  1st  of 
September.  Those  that  were  recorded  before  the  1st  day  of 
September  of  the  preceding  year  are  excluded.  But  those 
recorded  after  the  1st  of  September  are  included  in  order 
to  get  as  many  as  possible. 

Mr.  Dudley:  The  law  excludes  those  either  made  or  re- 

corded. Your  instructions  are  to  include  those  made  prior 
to  September  1st  hut  recorded  after  September  1st. 

Mr.  Haugen : Yes ; in  order  to  get  as  many  data  as  pos- 

sible. 

Mr.  Dudley:  The  trouble  is  it  seems  to  produce  confu- 

sion. Some  registers  have  followed  the  statute.  And  your 
instructions,  I think,  are  clearly  repugnant  to  the  statute. 

Each  of  these  1105  deeds  have,  however,  been  read  in 
full,  the  parties  to  the  transaction,  witnesses  or  agents, 
have  been  interviewed,  and  the  conclusion  reached  is  that 


59 


593  of  the  1105  deeds  can  not  properly  be  used  in  any 
theory  of  determining  a ratio  of  assessment.  We  do  not  say 
that  including  these  593  deeds  in  his  report  was  in  each  in- 
stance an  error  on  the  part  of  the  register  of  deeds,  for  the 
fact  that  they  should  be  excluded  was,  in  many  instances, 
not  apparent  on  the  face  of  the  deeds,  but  could  only  be 
ascertained  by  further  incpiiry  into  the  circumstances  at- 
tending the  transactions. 

The  total  consideration  in  the  512  deeds  in  which  the 
consideration  was  found  to  be  an  expression  of  actual  value 
amounted  to  $1,025,194,  and  these  512  descriptions  were 
assessed  for  the  year  1903  at  $517,085,  so  that  a ratio  is 
obtained  for  1903  for  Milwaukee  County,  based  upon  a re- 
vision of  the  sales  reported  by  the  register  of  deeds  and  the 
assessment  rolls  of  1903,  of  50.44$.  Considering  only  the 
sales  in  the  City  of  Milwaukee  the  number  reported  by  the 
register  of  deeds  was  789  of  which  it  was  found,  after  this 
process  of  investigation  and  elimination,  that  only  336  re- 
mained for  use  in  arriving  at  a ratio.  The  ratio  of  the  reg- 
ister of  deeds  based  upon  the  consideration  given  in  the  789 
deeds  and  the  assessment  of  1902  was  67.89$  for  the  City 
of  Milwaukee.  The  ratio  based  upon  the  total  considera- 
tion of  the  336  deeds  and  the  assessment  of  1908  was  52.07$. 
The  total  number  of  sales  in  Milwaukee  County  outside  of 
the  City  of  Milwaukee  reported  by  the  register  of  deeds 
was  316,  and  the  ratio  between  the  assessed  value  of  1902 
and  the  consideration  reported  was  52.12$.  After  investi- 
gation it  was  found  that  only  176  of  the  316  deeds  could 
be  regarded  as  competent  evidence  in  the  determination  of 
the  ratio,  and  the  ratio  existing  between  the  consideration 
in  these  176  deeds  and  their  assessed  value  of  1903  was 
42.84$. 


60 


JSTow  if  we  apply  these  1903  ratios  to  the  assessed  values 
of  1903,  we  obtain  the  following  figures  for  the  value  of 
Milwaukee  County:  Real  estate  of  Milwaukee  City  was 
assessed  at  $142,520,116.  Applying  the  ratio  of  52.07$ 
gives  a value  for  the  city  real  estate  of  $273,708,692,  and 
applying  to  the  assessed  value  of  real  estate  outside  of  the 
city,  to-wit,  $31,057,158,  the  ratio  of  42.84$  gives  a value 
of  $72,495,700  for  real  estate  in  Milwaukee  County  outside 
of  the  city,  or  a total  valuation  for  the  real  estate  of 
Milwaukee  County  of  $346,204,392.  The  assessed  value 
of  all  real  estate  in  Milwaukee  County  for  1903  was  $173,- 
577,574,  which  is  50$  of  the  true  value  of  all  of  the  real 
estate  in  the  county  as  thus  figured. 

To  test  the  accuracy  of  these  results  the  committee  in- 
stituted certain  independent  lines  of  inquiry.  The  Ameri- 
can Appraisal  Company,  a corporation  of  this  state,  of 
which  Mr.  E.  IT.  Bottum  of  Milwaukee  is  president,  and 
which  has  annually  appraised  property  of  the  value  of  many 
millions  of  dollars,  was  employed  to  appraise  463  descrip- 
tions in  the  City  of  Milwaukee  representing  all  classes  of 
real  estate  and  all  parts  of  the  city.  The  total  valuation 
placed  upon  the  463  descriptions  by  the  Appraisal  Com- 
pany was  $3,664,488.16,  and  the  assessed  value  of  the 
same  descriptions  for  the  year  1903  was  $1,926,420,  from 
which  it  would  appear  that  the  ratio  of  assessed  to  true 
value  used  in  the  assessment  rolls  of  1903  was  52.57$. 

Mr.  Brown,  until  recently  and  for  a period  of  nine  years 
Tax  Commissioner  of  the  City  of  Milwaukee,  a former 
mayor  and  life  long  resident  of  the  city,  and  whose  ability 
to  make  a just  appraisal  we  believe  to  be  unexcelled,  was 
also  asked  to  appraise  these  same  descriptions.  The  re- 
sult of  his  work  showed  a valuation  of  $3,829,857  as  against 


61 


the  $3,664,448.16  of  the  Appraisal  Company,  and  the  ratio 
between  Mr.  Brown’s  valuation  and  the  1903  assessment 
was  50.03$  as  compared  with  52.57$  based  on  the  figures 
of  the  American  Appraisal  Company. 

One  other  test  of  the  ratio  used  in  making  the  assess- 
ment roll  of  1903  in  the  City  of  Milwaukee,  although  per- 
haps not  as  conclusive  as  the  foregoing,  may  be  mentioned. 
The  Chicago,  Milwaukeee  and  St.  Paul  Railway  Company 
had  its  land  values  in  the  City  of  Milwaukee  appraised  for 
its  report  of  physical  values  which  has  been  submitted  to 
this  board. 

Here  is  a block  owned  by  the  Railroad  Company,  which, 
has  a certain  number  of  square  feet,  but  is  not  assessed; 
and  here  is  a piece  of  similar  property  not  owned  by  the 
Railroad  Company  which  is  locally  assessed. 

From  a consideration  of  the  assessed  property  and  its  area 
a hypothetical  “assessed  value”  was  obtained  for  the  railroad 
land  which  is  not  subject  to  local  assessment. 

Chairman  Gilson : Explain  the  method  whereby  you  ar- 

rived at  the  area  of  adjoining  lands. 

Mr.  Dudley:  They  were  lots,  and  we  could  easily  get 

at  it. 

Chairman  Gilson : You  would  take  the  lots  fronting  on 

your  land,  or  take  entire  blocks  adjacent? 

Mr.  Dudley:  I don’t  know  but  Mr.  Brown  can  answer 

that  better  than  I can ; but  I have  the  work  right  here,  I 
think.  Here  it  is.  For  instance  here  is  a description  of 
our  property,  and  the  area  has  been  figured  out,  and  below 
that  is  a list  of  the  tracts  with  which  that  has  been  com- 
pared in  this  manner:  We  add  the  assessed  values,  which 

amount  to  $16,500;  and  the  number  of  square  feet  assessed 


62 


was  18,000.  This  gave  an  average  assessed  value  per  square 
foot  of  $.9166.  Multiplying  that  by  the  area  of  our  prop- 
erty, which  was  similar  and  adjacent  to  the  assessed  property, 
gives  what  we  assumed  would  be  the  valuation  which  would 
have  been  put  upon  our  property  had  it  been  assessable. 
That  is  rather  a back-handed  way  of  working  out  the  ratio; 
but  we  were  curious  to  see  what  our  assessment  would  have 
been  had  we  been  assessed  as  other  property  adjoining  us. 
In  that  manner  we  found  a ratio  of  47.29$  between  the 
hypothetical  assessment  and  our  appraised  value. 

The  value  of  this  company’s  lands  in  the  City 
of  Milwaukee  exclusive  of  improvements  was  found 
to  be  $5,395,666.  These  lands  were,  of  course,  ex- 
empt from  local  taxation  and  are  not  valued  on 
the  assessment  rolls,  but  it  was  found  that  had 
these  lands  been  assessed  for  the  year  1903,  as  an  equal 
area  of  similar  adjoining  properties  was  assessed,  our  value 
would  have  been  $2,551,395,  which  is  47.29$  of  the  true 
value  fixed  by  the  company  and  reported  to  this  board. 

The  best  evidence  we  have  to  submit  indicates  that  the  real 
estate  of  Milwaukee  County  as  a whole  was  assessed  for 
1903,  at  about  50$  of  its  actual  value  and  that  the  county 
outside  of  the  city  was  assessed  at  42.84$. 

Chairman  Gilson  : Our  object  was  to  furnish  a larger 

field  of  data  than  would  be  given  if  conveyances  made  and 
recorded  between  September  1st  of  one  and  September  1st 
of  another  year  were  given. 

Mr.  Dudley:  I cannot  see  any  objection  to  having  the 

larger  data,  the  data  of  sixteen  months  instead  of  twelve, 
if  it  were  uniform;  but  a scrutiny  of  the  reports  you  ask 
shows  that  the  registers  did  not  regard  the  law,  nor  did  they 
regard  the  commission’s  circular. 


63 


Mr.  Haugen : The  last  section  of  the  chapter  provides 

that  each  Register  of  Deeds  shall  make  and  transmit  such 
further  information  recorded  in  his  county  as  the  Commis- 
sioner of  Taxation  may  request, 

Mr.  Dudley:  I don’t  believe  that  would  authorize  you 

to  use  16  months  for  a year. 

Mr.  Haugen : But  it  is  in  addition. 

Mr.  Dudley:  You  haven’t  asked  for  it  in  that  way,  have 
you  ? I don’t  think  that  is  material ; only  I thought  it  would 
introduce  an  element  of  lack  of  uniformity.  The  Register 
of  Deeds  use  the  year  from  September  1st  to  September  1st. 

Chairman  Gilson:  It  wouldn’t  impair  the  value  of  the 

statistics,  except  to  give  a smaller  data  than  otherwise  would 
be  obtained. 

Mr.  Dudley:  As  I say,  I don’t  see  any  objection  to  using 
the  16  months  period  rather  than  the  12  months. 

Mr.  Bowers : The  value  to  be  attached  to  the  statistics  is 

undoubtedly  in  the  discretion  of  the  board. 

Mr.  Haugen:  Some  of  the  Registers,  in  making  reports 

under  the  former  statutes  include  all  conveyances  recorded 
during  the  year,  and  some  of  them  were  ten  years  of  age. 

Mr.  Dudley:  I think  our  investigation  has  shown,  what- 

ever your  instructions  and  whatever  the  law,  that  the  reports 
are  valueless. 

We  have  not  been  able  to  apply  the  same  tests  to  the  state 
outside  of  Milwaukee  County  but  something  has  been  done 
in  two  of  the  adjoining  counties,  namely,  Ozaukee  and 
Racine,  where  the  unreliability  of  the  reports  of  Registers 
of  Deeds  is  still  further  demonstrated.  Let  me  first  read  a 
portion  of  the  law  under  which  the  Register  of  Deeds  acts : — 

“Each  register  of  deeds  shall  annually  make  and  trans- 


64 


mit  to  the  Secretary  of  State  on  or  before  the  15th  day  of 
September  a statement  in  tabular  form  of  all  conveyance  of 
real  estate,  including  executory  contracts  for  the  sale  of 
lands,  made  and  recorded  in  his  county  during  the  year 
ending  on  the  first  day  of  said  month  which  appear  to  have 
been  made  under  ordinary  conditions  in  the  usual  course  of 
business  for  a consideration  expressed  wholly  in  money.” 

My  attention  has  been  directed  to  a circular  issued  by 
the  State  Tax  Commission  dated  June  19th,  1903,  addressed 
to  the  Registers  of  Deeds  and  requesting  them  to  include  in 
their  reports  all  proper  conveyances  dated  after  April  30, 
1902,  and  before  September  1,  1903.  I submit  that  these 
instructions  are  repugnant  to  the  statute.  The  statute  con- 
templates that  no  conveyance  shall  be  reported  that  was  not 
made  and  recorded  between  September  1,  1902,  and  Septem- 
ber 1,  1903,  while  the  instructions  are  to  include  certain 
conveyances  made  not  only  during  that  period  but  also  dur- 
ing the  period  from  April  30,  1902,  to  September  1,  1902. 
It  seems  quite  possible  that  as  a result  of  these  instructions 
conveyances  during  four  months  of  1902  were  included  in 
the  1903  report  of  the  registers  as  well  as  in  their  1902 
report. 

But  a scrutiny  of  the  returns  from  Ozaukee  County  shows 
that  the  register  regarded  neither  the  law  nor  the  commis- 
sion’s instructions  in  his  report ; for  of  the  141  deeds  which 
he  reported  24  were  both  made  and  recorded  prior  to  Sep- 
tember 1,  1902.  The  law  requires  that  only  deeds  be  re- 
ported where  the  consideration  is  expressed  wholly  in  money 
but  of  the  remaining  117  deeds  (after  deducting  the  24 
which  were  made  and  recorded  prior  to  September  1,  1902) 
21  were  subject  to  encumbrances  which  the  grantees  accord- 
ing to  the  terms  of  the  deeds  assumed.  The  consideration 
in  these  21  deeds  as  given  by  the  Register  of  Deeds  is 


65 


$71,112.50;  but  the  actual  consideration,  that  is  the  con- 
sideration paid  for  the  equity  plus  the  encumbrances  as- 
sumed, was  $102,467.50.  The  assessed  valuation  of  these 
21  pieces  for  1902,  was  $52,230.  We  have  not  obtained 
their  assessment  for  1903.  Eleven  other  sales  in  this  county 
were  reported  where  the  consideration  was  not  expressed 
wholly  in  money  and  where  the  real  consideration  could  not 
be  determined  from  an  examination  of  the  deed  itself.  These 
were  cases  where  property  was  conveyed  for  a certain  sum 
subject  to  dower  rights,  etc.  In  one  of  the  deeds  reported 
the  sale  price  is  compared  with  the  assessed  value  of  a dif- 
ferent description. 

Mr.  Curtis : What  do  you  argue  from  that  last  mentioned 
state  of  facts  ? 

Mr.  Dudley : I argue  that  no  correct  conclusion  can  be 

drawn  from  the  register’s  report  without  submitting  it  to 
a test  of  accuracy. 

Mr.  Bowers : In  the  same  county  weren’t  there  other, 

numerous,  deeds  where  the  expressed  consideration  was  way 
beyond  the  assessed  value  ? Is  it  to  be  supposed  that  the 
assessor  of  this  particular  county  was  assessing  one  or  two 
tracts  of  land  that  way,  and  not  generally  ? 

Mr.  Haugen:  You  have  to  go  to  the  individual  assess- 

ment district,  if  you  were  going  to  apply  the  same  rule  to 
different  assessments ; because  one  might  assess  full  value, 
and  the  other  might  not. 

Mr.  Dudley:  We  have  taken  the  county  as  a district. 

Such  an  examination  as  this  shows,  we  think,  the  abso- 
lute folly  of  relying  upon  the  returns  of  Registers  of  Deeds 
without  submitting  their  reports  to  a most  thorough  revision. 
But  a consideration  of  the  report  in  this  county  gives  rise 


66 


to  another  thought.  The  Tax  Commission  has  made  stren- 
uous efforts  to  have  the  local  assessors  place  the  full  value 
of  property  upon  their  assessment  rolls  and  for  a determi- 
nation of  true  value  emphasis  has  been  placed  upon  the  rec- 
ord of  sales.  An  assessor  who  places  upon  property  a value 
less  than  that  for  which  it  was  recently  sold  in  the  ordinary 
course  of  trade  can  hardly  assert  that  his  under-valuation 
was  due  to  ignorance,  and  his  attention  has  recently  been  re- 
peatedly and  emphatically  called  to  the  sales  records  as  a 
means  of  ascertaining  values. 

But  the  very  fact  that  the  record  of  sales  is  being  re- 
sorted to  by  this  board  and  by  the  local  assessors  has  made 
real  estate  men  reluctant  to  put  on  record  the  true  value  of 
property  transferred  lest  it  might  be  used  as  a valuation  for 
tax  purposes.  It  is  not  surprising,  therefore,  to  find  in 
Ozaukee  County  that  out  of  117  deeds  20  show  considera- 
tions below  assessed  value,  the  aggregate  consideration  of 
the  20  deeds  being  $20,124,  and  the  aggregate  assessment  be- 
ing $24,180.  It  seems  incredible  that  any  rational  man  can 
suppose  that  of  117  transfers  reported  to  have  been  made 
in  the  ordinary  course  of  business  for  a consideration  ex- 
pressed wholly  in  money  that  more  than  one  out  of  every 
six  were  assessed  for  more  than  their  true  value.  Can  anyone 
doubt  that  the  consideration  in  these  deeds  was  fixed  to 
deceive  the  assessor  ? Is  it  not  reasonable  to  suppose  that 
the  consideration  in  these  deeds  was  fixed  not  to  show  the  true 
value  of  the  property  transferred  but  to  prepare  the  prem- 
ises for  the  erroneous  conclusion  that  the  property  was  as- 
sessed at  its  full  value  ? But  further  than  this,  10  other 
descriptions  of  the  117,  or  about  one-eleventh,  show  that 
the  properties  vrere  sold  for  exactly  the  figure  at  v'hich  they 
were  assessed  the  previous  year. 


67 


We  believe  that  this  scrutiny  of  the  records  of  Ozaukee 
County  shows  that  a large  number  of  the  deeds  reported 
should  have  been  omitted  from  the  register’s  returns  and 
that  a large  number  of  the  remaining  ones  show  considera- 
tions placed  in  the  deeds  for  the  very  purpose  of  producing 
errors  in  the  conclusions  which  were  intended  to  be  drawn 
from  them.  What  the  actual  value  was  which  each  of  the 
parties  to  these  transactions  placed  upon  his  property  we 
do  not  know  for  we  have  not  been  able  as  in  Milwaukee 
County  to  interview  the  parties.  But  if  we  take  the  21 
deeds  which  were  reported  but  which  investigation  showed 
were  made  subject  to  mortgage  and  add  to  the  considera- 
tion the  amount  of  encumbrances  shown  by  the  deeds  them- 
selves we  find  a total  value  of  the  21  descriptions  of  $102,- 
467.50,  and  the  assessment  of  those  descriptions  for  1902, 
was  $52,230,  which  gives  a ratio  of  50$. 

Mr.  Curtis : How  far  does  that  ratio  vary  from  the  ratio 

of  those  that  you  found  suitable;  that  is,  free  from  objec- 
tion. 

Mr.  Dudley:  I haven’t  got  the  total.  In  getting  at  the 

ratio  of  50$  we  have  not  been  able  to  find  out  how  many 
are  free  from  objection,  because  we  have  not  been  able  to 
interview  the  parties.  In  about  one-eleventh  of  the  deeds 
the  consideration  was  exactly  the  assessed  value. 

Mr.  Curtis:  You  have  made  no  generalization  from  any 

of  the  data  ? 

Mr.  Dudley:  Ho,  sir,  except  as  stated.  I thought  in 

those  deeds  that  were  made  subject  to  mortgage  there  was 
probably  less  “doctoring”  than  in  the  others. 

Chairman  Gilson : Can  you  assume  the  mortgages  should 

be  added  to  the  consideration  expressed  in  the  deed?  That 
is,  where  the  mortgage  is  to  be  assumed — say  property  is 


68 


worth  $5,000,  and  there  is  a mortgage  of  $2,500,  does  it 
follow  that  the  consideration  may  not  be  stated  “Five  Thous- 
and Dollars”  as  well  as  “Twenty-five  Hundred  Dollars.” 

Mr.  Dudley : If  it  read,  “This  deed  is  given  for  a con- 

sideration of  Five  Thousand  Dollars,”  and  then  in  a subse- 
quent clause,  “This  deed  is  subject  to  a mortgage  of  Twenty- 
five  Hundred  Dollars,”  and  the  register  reported  “$5,000”, 
his  report  would  not  indicate  the  value  of  the  property. 
But  if  I add  the  twenty-five  hundred,  the  sum  might  show 
the  value. 

Mr.  Bowers : Makes  the  consideration  $7,500. 

Mr.  Curtis:  Don’t  the  scriveners  who  are  usually  or 
often  employed  in  the  preparation  of  deeds  of  conveyance 
recite  in  the  deed  of  conveyance,  in  such  cases  as  you  now 
speak  of,  the  whole  consideration ; notwithstanding  the  fact 
that  it  is  also  in  the  conveyance  that  it  is  made  subject  to  cer- 
tain incumbrances.  In  other  words,  a conveyance  of  a prop- 
erty really  of  the  value  of  $5,000,  subject  to  an  incumbrance 
of  $2,500,  notwithstanding  the  fact  it  is  subject  to  such  in- 
cumbrance, and  the  grantee  takes  it  subject  to  such  incum- 
brance, and,  if  you  please,  agrees  to  pay  it  all,  that  the 
scrivener  will  write  in,  however,  as  the  consideration  for 
the  conveyance  in  the  agreement  the  actual  value  of  the 
property,  to-wit : $5,000  ? 

Mr.  Dudley : That  is,  the  equity  is  worth  $2,500 ; sub- 

ject to  a $2,500  mortgage;  but  instead  of  putting  in  the 
value  of  the  equity  he  puts  in  $5,000  ? 

Mr.  Curtis : Yes. 

Mr.  Dudley:  My  experience  has  been  limited;  but  so 

far  as  it  goes,  it  is  the  other  way. 

Mr.  Curtis : Perhaps  that  would  be  the  most  correct  way, 


69 


but  isn’t  it  a fact  that  scriveners  would  do  both  ways  in 
writing  out  deeds  ? 

Mr.  Dudley : They  could  do  both  ways. 

Mr.  Peck:  I think  the  general  rule  is  to  make  the  con- 

sideration aside  from  the  mortgage. 

Mr.  Curtis : Let  the  consideration  represent  the  equity  ? 

Mr.  Peck:  Yes. 

Mr.  Bowers : That  is  the  import  of  the  face  of  the  paper. 

Mr.  Peck:  I can  conceive  that  the  document  might 

state  “Five  Thousand  dollars,”  and  provide  for  assuming  a 
$2,500  mortgage,  and  the  payment  of  $2,500  in  cash. 

Chairman  Gilson : It  might  be  good  ground  for  exclud- 

ing those  conveyances  from  consideration.  They  might  not 
furnish  any  basis  for  confirmative  conclusions. 

Mr.  Peck:  They  are  not  to  be  reported,  I should  say, 

under  the  general  law. 

Mr.  Curtis : I agree  they  are  suspicious  enough  to  be 

excluded  from  computation ; but  if  included  it  doesn’t  neces- 
sarily follow  we  can  safely  assume  the  recital  of  the  con- 
sideration represented  the  equity  only. 

Mr.  Dudley : Perhaps  Mr.  Brown  has  some  concrete  cases 
there  which  would  show  exactly  what  the  situation  was. 

Chairman  Gilson : Concrete  cases  can  not  amount  to 

much  in  the  consideration  of  questions  of  this  kind. 

Mr.  Thos.  IT.  Brown:  The  language  of  the  deed  might 

make  some  difference.  (Reading.)  “Except  a mortgage 
to  John  Burton  of  two  thousand  dollars,  of  which  eight 
hundred  has  been  paid.”  “Except  a mortgage  of  $1,100, 
with  interest  thereon,  which  the  second  party  assumes  to 
pay  as  a part  of  the  purchase  money.” 


70 


Mr.  Haugen : Is  that  a part  of  the  purchase  price  set 
forth:  Is  that  to  be  read  as  a part  of  the  purchase  price 

mentioned;  or  in  addition  to  the  purchase  price? 

Mr.  Brown : I shouldn’t  read  it  that  way. 

Mr.  Haugen : It  says  “part  of  the  purchase  money.” 

Mr.  Curtis : I think  there  will  be  a pretty  general  agree- 

ment that  cases  of  that  kind  ought  to  he  excluded  from  con- 
sideration. 

Mr.  Bowers:  This  recital  of  consideration  in  the  initial 
part  of  the  deed  is  almost  universally  accompanied  by  ac- 
knowledgment of  receipt.  How  is  the  grantor  bound  to 
acknowledge  the  receipt  of  $10,000,  when  he  has  only  got 
$7,500,  and  $2,500  is  equity,  paid  on  the  note  ? I shouldn’t 
think  that  would  be  true,  in  the  minds  of  careful  lawyers. 

Mr.  Baldwin : In  case  of  failure  of  title,  the  consider- 

ation might  be  important. 

Mr.  Dudley:  In  this  county  we  get  from  the  Register 

of  Deeds  Reports  a ratio  of  79$.  We  think  50$  is  nearer 
the  truth. 

In  Racine  County  the  Register  of  Deeds  reported  432 
sales  having  the  aggregate  consideration  of  $905,855,  and 
the  aggregate  assessed  value  of  $657,285,  producing  a ratio 
of  72.56$.  Of  these  sales  28  had  no  place  in  the  Register’s 
report,  as  they  were  both  made  and  recorded  prior  to  Sep- 
tember 1,  1902.  There  were  51  deeds  reported  with  a 
consideration  of  $144,340  and  an  assessed  value  of  $115,- 
065,  which  indicated  that  the  property  described  in  these 
51  deeds  was  assesssed  at  80$  of  true  value,  but  investiga- 
tion showed  that  each  of  the  51  deeds  was  made  subject  to 
a mortgage,  and  adding  to  the  reported  consideration  (which 
did  not  include  the  value  of  the  mortgages  assumed)  the 


71 


amount  of  the  mortgages  would  give  an  actual  value  of  the 
property  of  $225,015,  which,  compared  with  the  assessed 
values  of  the  property,  produces  a ratio  of  51$  as  compared 
with  the  80$  derived  from  the  incorrect  report  of  the  Beg- 
ister  of  Deeds. 

In  this  county  there  were  12  instances  in  which  the  con- 
sideration in  the  deed  was  exactly  the  assessed  value  and 
12  instances  in  which  the  consideration  was  less  than  as- 
sessed value,  and  there  are  27  other  sales  where  the  consid- 
erations are  not  expressed  wholly  in  money,  having  been 
made  subject  to  conditions  which  can  not  be  valued  in 
money  but  which  must  have  materially  affected  the  selling 
price. 

Before  leaving  Bacine  County  it  may  be  interesting  to 
note  that  the  total  assessed  value  of  all  property  in  that 
county  for  1902  was  $32,212,568,  while  the  total  assessed 
value  for  1903  was  $31,508,477,  showing  that  although 
there  is  now  a supervisor  of  assessment  whose  duty  it  is  to 
bring  about  a full  assessment,  there  was  an  actual  loss  in 
the  assessment  of  that  county  of  $704,091. 

The  committee  has  some  evidence  as  to  the  ratio  of  as- 
sessment employed  in  Brown,  Oconto,  Outagamie,  Shawano, 
Winnebago,  Wood  and  Marinette  Counties.  This  consists 
of  testimony  given  by  persons  familiar  with  those  counties 
who  have  acted  as  members  of  boards  appointed  by  the  Cir- 
cuit Courts  to  equalize  valuations  between  taxing  districts 
of  their  respective  counties.  The  sum  of  the  actual  values 
of  real  estate  for  1903  placed  by  these  gentlemen  upon  their 
counties  was  $175,344,671,  while  the  assessed  values  of 
the  same  counties  for  1903  was  $131,907,893,  giving  an 
average  assessment  in  those  counties  of  75$  of  true  value. 
We  submit  these  figures  as  to  the  eight  counties  for  what 


72 


they  may  be  worth.  We  believe  they  show  too  high  a ratio. 
They  were  based  upon  calculations  that  were  not  nearly  so 
far  reaching  as  those  which  we  were  enabled  to  make  for  the 
City  and  County  of  Milwaukee.  Investigations  outside  of 
Milwaukee  have  necessarily  been  limited,  but  we  believe  that 
enough  has  been  done  to  show  that  the  reports  of  the  Regis- 
ters of  Deeds  can  not  be  accepted  with  further  scrutiny.  It  is 
not  sufficient  to  eliminate  those  sales  which  on  the  face  of 
the  return  should  have  been  omitted.  An  examination  of 
the  deeds  themselves  is  necessary,  and  further  than  that 
parties  familiar  with  the  transactions  should  be  interviewed. 
Our  investigation  all  tends  to  show  that  the  ratio  derived 
from  the  returns  of  the  Registers  of  Deeds  is  too  high  and 
hence  the  true  value  of  the  general  property  of  the  state  de- 
termined by  such  ratio  does  not  exceed  the  assessed  value 
as  much  as  it  ought. 

But  we  have  had  the  value  of  the  real  estate  outside  of 
Milwaukee  County  computed  on  the  basis  of  the  Registers 
of  Deeds’  returns  for  the  last  year.  This  work  was  done  by 
Mr.  Polleys,  of  the  Omaha  Road,  who  can  give  the  details  of 
his  work.  Briefly,  Mr.  Polleys  first  took  four  or  five  coun- 
ties and  worked  out  their  values  by  separate  taxing  districts. 
He  then  ascertained  their  values  considering  the  county  as 
a unit.  The  results  were  so  nearly  alike  that  Mr.  Polleys 
concluded  that  he  would  be  substantially  correct  if  the 
county  were  used  as  a unit  instead  of  the  individual  dis- 
tricts, thus  enabling  him  to  deal  with  seventy  territorial 
units  instead  of  some  1,300  or  1,400,  and  of  course  greatly 
abridging  his  work.  The  result  of  Mr.  Polleys’  computa- 
tions give  an  actual  value  of  real  estate  outside  of  Milwaukee 
County  of  $1,312,549,821,  but  this  we  regard  as  too  low  a 
valuation  for  the  reason  that  it  is  based  upon  the  returns  of 


73 


the  Registers  of  Deeds  which  our  investigations  show  give 
too  high  a ratio. 

Mr.  Curtis : That  is  based  on  sales  reported  in  the  year 

1903? 

Mr.  Dudley:  Yes;  one  year’s  basis;  compared  with  the 

assessment  roll  of  1902. 

Mr.  Curtis:  But  the  ratio  applied  to  the  local  assess- 

ment of  1903. 

Mr.  Dudley:  No;  1902.  He  has  used  the  Board’s 

method,  except  that  he  used  one  year  as  a basis ; and  with 
this  further  exception;  after  determining  that  there  was  no 
practical  difference  whether  he  took  each  taxing  district  or 
an  entire  county  as  a unit,  he  took  the  county  as  a unit. 

This  Committee  is  not  prepared  to  demonstrate  that  the 
real  estate  of  Wisconsin  is  worth  any  particular  figure,  and 
in  the  nature  of  things  such  a demonstration  is  impossible. 
The  Commission  is  better  equipped  for  the  work  and  it 
may  be  has  already  brought  to  light  values  which  have  not 
been  discovered  by  the  companies.  But  if  we  were  asked  to 
place  a valuation  upon  the  real  estate  of  Wisconsin  based 
upon  our  investigations,  I think  we  might  fairly  figure  it 
as  follows: 

Bor  the  city  of  Milwaukee  I should  apply  to  the  assessed 
valuation  of  the  real  estate,  $142,570,116,  the  ratio  of 
52.07$,  which  would  give  a valuation  of  $273,708,692. 
This  is  the  ratio  obtained  by  comparing  the  considerations 
in  those  deeds  which  were  left  after  revision  of  the  report  of 
the  Register  of  Deeds  with  the  assessment  of  1903  of  the 
same  properties. 

To  the  real  estate  of  Milwaukee  County  outside  of  the 
city  I would  give  a valuation  obtained  by  applying  42.84$ 


74 


to  the  real  estate  assessment  of  1903  ($31,057,058),  which 
would  give  $72,495,700  for  actual  value.  This  gives  to  the 
real  estate  of  Milwaukee  County  a valuation  of  $346,204,- 
392,  which  is  almost  exactly  twice  the  total  assessed  value  of 
the  real  estate  of  the  county. 

The  real  estate  outside  of  Milwaukee  County  was  as- 
sessed for  1903  at  $927,336,471.  The  figures  obtained  by 
Mr.  Polleys  were  $1,312,549,821.  The  assessment  was  70$ 
of  Mr.  Policy’s  figures,  hut  Mr.  Polley’s  figures,  we  think, 
are  much  too  low*,  because  he  has  dealt  with  the  assessment 
roll  of  1902  and  with  the  figures  of  the  registers  which 
give  ratios  which  are  too  high.  We  have  the  testimony  of 
certain  well  informed  gentlemen  indicating  that  the  average 
assessment  of  eight  counties  is  at  75$;  we  believe  that  the 
best  existing  evidence  shows  that  Milwaukee  County  as  a 
whole  is  assessed  at  50$  and  that  the  county  outside  the 
city  ig  assessed  at  42.84$,  and  from  such  investigation  as 
has  been  been  made  in  Ozaukee  and  Racine  Counties  we 
believe  that  the  assessment  of  real  estate  is  about  50$.  If 
from  such  data  we  assume  that  the  real  estate  outside  of 
Milwaukee  County  was  assessed  on  the  average  at  63$,  the 
true  value  of  real  estate  outside  of  Milwaukee  County  would 
be  $1,471,962,652.  I do  not  believe  that  this  figure  is  un- 
reasonable. It  exceeds  Mr.  Polley’s  figures  by  $159,000,- 
000,  but  wre  should  expect  Mr.  Polley’s  method  to  produce 
too  low  a figure.  My  estimate  of  the  true  value  in  1903  of 
the  real  estate  in  Wisconsin  is  the  sum  of  the  figures  given 
for  Milwaukee  County,  namely,  $346,204,392,  and  that 
just  given  for  the  state  outside  of  Milwaukee  County,  which 
make  a total  of  $1,818,167,044. 

The  personal  property  of  the  state  was  assessed  for  the 
year  1903  at  $238,031,134.  If  one  wTere  to  judge  the  in- 


75 


chistrial  development,  the  comforts  of  living  enjoyed,  or  the 
degree  of  civilization  attained,  by  the  value  of  their  per- 
sonal property  as  shown  in  the  assessment  rolls,  the  con- 
clusion would  inevitably  he  that  the  people  of  Wisconsin 
are  still  living  in  the  middle  ages.  The  assessment  of  per- 
sonal property  in  this  state  is  a mere  farce.  Picture  an 
assessor  in  the  City  of  Milwaukee  in  the  performance  of 
his  duty.  His  work  of  valuing  property  must  he  done  in 
two  months.  He  is  compensated  at  the  rate  of  $60  per 
month.  In  the  performance  of  his  duty  he  must  assess  thb 
value  of  the  stock  of  a wholesale  dry  goods  store.  From 
this  he  passes  to  the  assessment  of  a packing  house.  Hext 
he  is  called  upon  to  value  the  diamonds,  watches,  silver- 
ware, etc.,  found  in  a jewelry  store;  his  omniscience  is  next 
to  he  applied  in  determining  the  value  of  the  stock  of  a 
wholesale  hardware  concern,  and  in  like  manner  he  is  re- 
quired to  value  all  classes  of  personal  property.  The  per- 
formance of  such  a duty  is  a sheer  impossibility.  I under- 
stand that  the  assessment  of  such  a concern  as  the  Grimbel 
Pros.’  store  in  the  City  of  Milwaukee  usually  occupies 
about  thirty  minutes.  It  is  absurd  to  say  that  there  is  such 
a thing  as  an  assessment  of  personal  property.  As  a matter 
of  fact  what  is  called  the  personal  property  assessment  might 
better  be  defined  as  voluntary  concessions  made  by  property 
owners. 

The  value  of  the  stocks  in  Wisconsin  of  merchants  and 
manufacturers  reported  to  a certain  commercial  agency  in 
1903  was  $179,820,902,  which  is  more  than  75^  of  the  en- 
tire personal  property  assessment.  In  its  October  valuation 
this  Commission  increased  the  assessed  value  from  $238,- 
081,134  to  $443,667,336,  and  used  as  a valuation  of  the 
real  estate  of  the  state  $1,309,504,464;  that  is,  the  personal 
property  under  the  October  valuation  was  fixed  at  about 


34$  of  the  real  estate  valuation.  If  the  same  per  cent  of 
the  $1,818,167,044  (which  is  our  estimate  of  the  value  of 
the  real  estate)  were  taken,  it  would  give  for  our  estimated 
value  of  the  personal  property  $618,176,795,  but  34$  we 
regard  as  too  low.  The  assessment  rolls  give  no  clue  as  to 
the  value  of  personal  property,  but  if  we  seek  the  views  of 
experts  and  economists  we  find  a practical  unanimity  of 
opinion  that  the  value  of  personal  property  in  such  a com- 
monwealth as  Wisconsin  exceeds  that  of  real  property. 

It  would  seem  to  be  more  than  conservative  if  in  esti- 
mating the  value  of  the  personal  property  of  the  state  such 
value  should  be  fixed  at  50$  of  the  estimated  value  of  the 
real  property,  and  on  that  basis  it  would  appear  reasonable 
to  fix  the  personal  property  valuation  for  1903  at  $909,- 
083,522,  and  this  added  to  the  estimate  heretofore  given  of 
the  real  estate  would  make  a total  valuation  of  the  general 
property  of  the  state  of  $2,727,250,566,  to  be  used  as  the 
divisor  in  ascertaining  the  average  rate  of  taxation.  And 
this  conclusion  seems  to  be  corroborated  by  the  fact  that 
the  average  rate  thus  produced  will  probably  not  materially 
differ  from  the  average  rate  in  adjoining  states. 

The  people  of  Wisconsin  are  not  a tax  ridden  people. 
We  do  not  believe  that  we  are  taxed  more  heavily  than  our 
neighbors  of  other  states,  and  many  papers  of  the  state 
have  recently  been  tireless  in  their  efforts  to  show  how  light 
is  the  burden  of  taxation  under  the  administration  of  such 
a man  as  the  present  Governor.  What  the  aggregate  is  of 
the  state,  county  and  local  taxes  for  the  year  1903  levied  on 
general  property  we  do  not  yet  know,  but  assuming  it  to  be 
$20,000,000,  the  average  rate  on  my  estimated  valuation  of 
the  general  property  would  be  about  7 mills.  Compare  this 
rate  with  that  paid  in  the  State  of  Iowa.  The  average  rate 


77 


of  taxation  in  that  state  is  about  32  mills,  but,  this  rate  is 
applied  to  one-fourth  the  assessed  value.  From  voluminous 
testimony  presented  to  the  Executive  Council  of  that  state 
in  July,  1902,  by  county  auditors  and  others  the  assessed 
value  of  the  state  appeared  to  be  about  80$  of  true  value. 
The  rate  of  32  mills  would,  therefore,  be  applicable  to  one- 
fourth  of  80$  or  20$  of  actual  value;  and  to  apply  32  mills 
to  20$  of  full  value  is  the  same  as  applying  a rate  of  six 
and  two-fifths  mills  to  full  value. 

Statement  of  W.  W.  Baldwin  on  The  Value  of  the 
Peesonal  Peopeety  in  Wisconsin  Subject 
to  Taxation. 


2 o’clock  p.  m. 

Mr.  Chairman  and  Members  of  the  Commission: 

I received  your  circular  letter,  asking  if  I desired  to  be 
present  at  the  preliminary  hearing  at  which  will  be  consid- 
ered the  question  of  the  valuation  of  the  railroad  property  in 
Wisconsin  belonging  to  the  Burlington  Company,  and  wish 
to  say  that  I desire  to  be  present  at  that  hearing. 

That  valuation,  when  it  is  made,  will  not  be  an  estimate 
of  value  upon  the  property  of  the  Burlington  Company  in 
Wisconsin,  for  the  purpose  of  selling  it,  nor  any  part  of  the 
securities  which  represent  it,  nor  for  obtaining  credit  upon 
it,  nor  for  estimating  or  illustrating  the  wealth  of  the  cor- 
poration. It  will  be  the  valuation  of  the  Commission  alone, 
and  made  by  it  for  a single  purpose  ; and  that  purpose  is  to 
affix  to  it  a certain  tax  rate.  That  rate  is  now  unknown.  It  is 
not  the  same  rate  that  is  being  paid,  nor  that  will  be 
paid,  by  any  other  individual  in  the  State  of  Wisconsin 
upon  his  property;  nor  by  any  other  corporation  in  Wiscon- 
sin upon  its  property,  except  it  be  a railway  company;  nor 
will  it  be  the  same  rate  that  is  being  paid  by  the  owners  of 
other  property  in  the  counties  and  in  the  taxing  districts  in 
which  the  property  of  the  Burlington  Company  in  the  State 
of  Wisconsin  is  situated.  It  will  be  the  Commission’s  own 


78 


rate  as  the  valuation  of  the  railroad  is  the  Commission’s  own, 
subject  only  to  the  mandate  of  the  constitution  that  “Tax- 
ation shall  be  uniform.” 

In  its  first  report,  that  of  1901,  the  Commission  formu- 
lated its  own  view  of  the  law  that  was  to  accomplish  this 
constitutional  duty  of  uniformity  and  equality  of  taxation 
in  Wisconsin  in  these  words : “A  law  that  will  equally  dis- 

tribute the  public  burden  among  all  the  citizens  of  the  state 
according  to  their  property  or  ability  to  pay.” 

Subsequently,  in  the  same  report,  you  stated  more  at 
length  the  general  principle  which  should  guide  in  consider- 
ing this  question  to-day,  in  these  words: 

“The  laws  of  the  states  generally  provide  for  the  assess- 
ment of  the  property  of  individuals  at  the  fair  or  market 
value,  but  this  is  not  done.  The  valuation  of  railroad  prop- 
erty at  full  value  and  other  kinds  at  one-half  value  or  less, 
when  the  same  rate  of  taxation  is  laid  on  both,  is  so  grossly 
inequitable  and  unjust  that  the  constant  effort  and  inclina- 
tion will  be  to  bring  the  former  down  to  the  common  level  or 
supposed  equality.  In  the  absence  of  reliable  data,  the 
levelling  process  is  a mere  estimate.  The  assessed  value  of 
property  other  than  railroads  is  usually  the  only  statistics 
available  to  state  boards,  and  is  little  or  no  guide  to  the  true 
value.  To  aid  the  boards  in  forming  judgment  as  to  relative 
value,  resort  is  sometimes  had  to  affidavits  or  evidence  of 
witnesses  who  give  opinions  of  the  value  of  property  in  differ- 
ent parts  of  the  state,  which,  instead  of  giving  light  on  the 
question,  are  generally  as  unreliable  as  assessors’  figures,  and 
tend  to  mislead  and  confuse.  Where  such  conditions  are 
found,  boards  are  confronted  with  the  duty  of  ascertaining 
the  value  of  all  property  in  the  state  and  the  value  of  rail- 
roads, of  making  comparisons,  and  then  of  assessing  or 
equalizing  the  railroad  property.” 

The  duty,  then,  of  this  board,  unquestioned  and  univer- 
sally acknowledged,  is  to  establish  such  a tax  rate  for  rail- 
road property  as  shall  make  the  tax  burden  rest  upon  the 


79 


owners  of  that  property  in  this  state  the  same  as  it  rests 
upon  the  shoulders  of  the  owners  of  all  the  other  property. 

I can  form  no  judgment,  gentlemen,  as  to  how  you  were 
impressed  with  the  evidence  that  was  presented  to  you  this 
morning  by  Mr.  Brown  and  others.  It  certainly  was  valu- 
able and  impressive  evidence  as  to  land  values  in  Wisconsin, 
and  proof  that  we  are  trying  in  good  faith  to  co-operate  with 
the  Board,  in  ascertaining  the  value  of  the  general  property 
of  this  state. 

I do  not  understand  that  anything  which  this  Commission 
has  yet  done  or  announced  at  any  time  or  place  is  incon- 
sistent with  the  view  that  this  whole  subject  is  to-day  before 
you  unsettled  and  for  consideration  in  its  broadest  aspect. 
I understand  that  your  minds  are  still  open,  and  absolutely 
without  prejudice  or  predetermination,  upon  the  broad  ques- 
tion of  what  average  rate  ought  to  be  fixed,  in  order  to  se- 
cure uniformity  and  equality  in  tax  burdens  as  between  the 
owners  of  railroads  and  the  owners  of  other  forms  of  prop- 
erty. 

HOW  RAILROADS  WILL  BE  VALUED. 

[Regarding  the  valuation  of  the  railroad  property  there 
can  hardly  be  any  doubt  in  the  mind  of  any  intelligent 
person  that  as  that  subject  is  developed  and  discussed  and 
conclusions  are  reached,  its  full  value  will  be  found  and 
declared.  We  all  know  that.  If  it  is  within  the  wit  of 
man  to  devise  plans  for  getting  information  and  applying  in- 
formation so  as  to  bring  out  every  element  of  value,  which 
have  not  been  devised  and  applied  to  the  question  of  the 
valuation  of  railroad  property,  I do  not  know  what  those 
plans  are.  klot  only,  as  Mr.  Crandon  has  said,  every  bolt 
and  screw  and  every  scrap  of  paper — all  the  physical  features 


80 


which  make  a railroad,  are  produced  in  fullest  detail  and 
submitted  to  your  scrutiny,  and  to  that  of  critics  and  en- 
gineers ; not  only  are  all  “franchise”  features  to  be  estimated, 
but  beyond  all  that  is  the  very  wide  field  where  it  is  possible 
to  go  into  the  question  of  earnings  of  the  companies  and  of 
market  quotations  upon  their  stocks  and  bonds,  and  many 
purely  speculative  elements. 

We  may  fairly  assume,  I think,  that  it  is  the  present  pur- 
pose and  intention  of  this  Board  to  take  the  full  market  and 
complete  actual  value  of  every  railroad  and  of  every  scrap 
and  fragment  and  item  of  value  in  the  property  of  every 
railroad  company,  whether  actually  or  constructively  in  the 
state,  and  whether  omitted  from  the  rolls  or  not,  and  apply 
to  such  complete  valuations  the  tax  rate  which  they  will  es- 
tablish. There  will  be  no  such  thing  as  “undervaluation” 
nor  “omitted  property”  in  the  case  of  the  railroads.  Does 
not  the  mandate  of  the  Constitution  that  taxation  shall  be 
uniform  require  in  the  case  of  the  general  property  of  the 
state,  real  and  personal,  that  there  shall  likewise  be  no  such 
thins:  as  either  omission  or  undervaluation  ? How  else  can 
there  be  equality  and  uniformity  ? Do  not  the  principles  of 
sound  morality  and  evenhanded  justice  require  this  ? Shall 
not  this  Board,  in  that  broad  discretion  which  belongs  to  it, 
under  the  Constitutional  guaranty,  see  to  it  that  in  the  gen- 
eral property  there  shall  not  be,  manifestly,  either  property 
omitted  from  taxation  nor  property  undervalued  in  the  as- 
sessment ? I hope  to  point  out  a way  in  which  this  may,  at 
least  partially,  be  accomplished  in  the  case  of  personal  prop- 
erty, both  in  the  matter  of  habitual  and  intentional  omission 
and  habitual  and  intentional  undervaluation. 


81 


RAILROAD  VALUES  AND  GENERAL  PROPERTY  VALUES. 

I do  not  approve  the  principle  of  taking  market  quota- 
tions of  stocks  and  bonds  as  the  test  of  value  of  the  property 
of  the  company  issuing  them,  nor  of  taking  net  earnings  as 
such  test  of  value.  But  there  is  a clear  line  of  distinction, 
worth  bearing  in  mind,  between  estimating  values  of  land 
and  of  goods  and  other  personal  property,  at  a specified  date, 
say  on  May  1,  1903,  and  when  you  come  to  the  question  of 
using  market  quotations  of  corporate  stocks  and  bonds  and 
the  earning  capacity  of  property,  retaining  a perfect  liberty 
to  take  prior  years  into  consideration.  The  distinction  to 
he  made  is  plain.  A tract  of  land  is  sold  in  1903.  If  you 
know  what  it  actually  and  truly  sold  for,  that  is  the  best 
evidence  in  the  world  of  its  value  in  1903.  Many  sales 
were  made  in  Wisconsin  in  the  past  year  of  lands,  and  lots, 
and  stocks  of  goods,  and  horses  and  other  property.  Those 
actual  sales  and  prices  and  the  conclusions  of  value  that  are 
to  be  drawn  from  them  are  the  resultant  of  all  the  forces 
and  influences  that  make  value — the  thing  we  call  “value.” 
That  is  the  value.  But  when  we  talk  about  sales  of  “securi- 
ties” that  have  been  issued  by  railroad  corporations,  we  are 
not  talking  about  sales  of  railroads.  We  are  talking  about 
an  entirely  different  matter.  Suppose  there  were  no  actual 
sales  of  horses,  nor  sales  of  land,  nor  lots,  hut  that  all  the 
lands,  lots  and  horses  were  owned  by  corporations,  and  the 
people  who  managed  these  corporations  had  issued  in  times 
past  certain  securities  upon  them.  The  Northwestern  and 
the  Milwaukee  Companies  are  to-day  operating  properties 
which,  as  we  say,  are  “capitalized”  for  so  much ; the  stocks 
and  bonds  outstanding  for  these  companies  have  come  down  to 
them  as  an  inheritance  of  past  years;  and  the  stock  market 


82 


quotations  that  are  announced  are  quotations,  not  of  sales 
of  railroad  property,  but  quotations  of  paper  representatives 
of  the  property,  and  subject  to  all  sorts  of  peculiar  influences 
and  conditions  which  may  or  may  not  show  value.  There 
are  highly  speculative  conditions  and  other  matters  that  in- 
volve questions  of  railroad  strategy  and  of  the  control  of 
one  road  by  another.  Now,  if  you  had  similar  conditions  in 
regard  to  land,  and  personal  property,  and  if  you  were  under- 
taking to  determine  values  from  such  conditions — if  there 
was  a great  auction  or  market  for  shares  representing  the 
general  property  of  the  state,  then  I would  not  maintain 
that  you  could  dare  to  consider  stock  market  quotations  of 
such  shares  for  a single  year  only.  You  would,  beyond  all 
question,  go  back  into  a series  of  years.  Likewise,  upon  the 
question  of  earnings,  which  are  so  susceptible  to  great 
changes,  depending  upon  prosperous  or  adverse  business 
conditions  in  the  country  at  large,  in  successive  years. 

Under  the  law  which  defines  your  powers  you  are  posi- 
tively required  to  find  the  value,  the  true  full  value,  of  the 
general  property  of  Wisconsin  on  the  first  day  of  May,  1903, 
which  is  not  the  same  thing  as  its  average  full  value  for  the 
past  seven  years,  or  the  past  five  years,  or  the  past 
three  years.  The  performance  of  that  plain  duty  ought 
not  it  seems  to  me  to  be  marred  or  hindered  by  the  fact 
which  is  equally  plain  and  clear  that  it  is  inexact  and  mis- 
leading and  therefore  impossible  to  accept  stock  market 
quotations  of  the  shares  of  a railroad  company  for  any  one 
year,  or  the  earnings  of  that  railroad  for  any  single  year,  as 
proof  of  the  value  of  the  property  of  that  company. 

Such  quotations  do  not  prove  value.  If  taken  for  a series 
of  years  they  throw  some  light  upon  value,  while  for  a single 
year  they  may  wholly  deceive  as  to  value. 


83 


The  Sales  Repoets  as  a Test  of  Land  Values. 

Allow  me  one  word  generally,  upon  the  question  of  the 
sales  method  of  valuation  of  the  landed  property.  I thor- 
oughly sympathize  with  the  feeling  and  wish  of  the  commis- 
sion to  seek  for  some  true  and  fair  test  of  land  value.  I 
sympathize  with  the  hope  of  the  commission  to  find  that  land 
sales  as  reported  to  the  Secretary  of  State  are  a fair  indica- 
tion of  true  value.  If  you  had,  in  fact,  the  whole  truth  be- 
fore you  regarding  these  sales,  and  could  accurately  compare 
them  with  the  assessment,  carrying  out  the  full  spirit  of  the 
law  which  Mr.  Dudley  read,  I am  not  in  a position  to  find 
fault  with  the  theory.  On  the  other  hand,  no  one  can  fairly 
criticise  the  commission  if  it  should,  upon  evidence,  modify 
its  view  or  hope  as  to  the  reliability  of  these  reports  of  land 
sales.  As  you  say,  Wisconsin  is  probably  the  only  state 
which  has  these  statistics  so  fully,  and  so  far  as  I know,  this 
is  the  first  real  opportunity,  or  occasion,  when  that  theory, 
so  far  as  it  is  a theory,  is  put  to  the  test. 

If  the  Commission  had  made  for  itself  the  kind  of  in- 
vestigation which  has  been  disclosed  by  the  evidence  here 
to-day,  or  any  other  careful  investigation  to  test  the  sound- 
ness of  the  conclusions  drawn  from  these  reports  of  sales,  the 
case  would  be  different.  But  assuming  that  the  evidence  is 
satisfactory;  assuming  that  it  is  reliable;  assuming  that  Mr. 
Brown  is  competent,  and  that  the  examinations  which  he  has 
made  are  trustworthy,  how  can  you  possibly  feel  that  you  have 
before  you  in  these  reports  of  land  sales  made  to  the  Secre- 
tary of  State,  a basis  for  determining  values  of  land  that  will 
do  ? There  are  eighty  thousand  different  land  assessments 
in  the  City  of  Milwaukee.  During  the  year  about  eight  thou- 
sand sales  were  made  in  Milwaukee,  and  out  of  these  sales, 


84 


reports  of  eleven  hundred  sales  were  made  to  the  Secretary 
of  State  as  being  for  money,  and  each  showing  in  the  deed 
the  real  consideration.  These  eleven  hundred  sales,  with  the 
considerations  stated  in  the  deeds  and  the  assessments  upon 
the  same  tracts,  have  been  accepted  as  genuine  tests  of  value 
and  the  percentage  they  indicate  has  been  accepted  and  ap- 
plied to  the  entire  real  estate  assessment  of  Milwaukee.  But 
they  are  not  genuine  tests  of  value — not  half  of  them.  A 
careful  scrutiny  discloses  conclusively  that  in  only  three  hun- 
dred and  thirty-six  of  these  transactions  do  the  deeds  show 
the  true  and  real  consideration  of  the  sale ; all  the  others  are 
spurious,  for  the  purpose  used. 

In  Milwaukee  County  there  are  one  hundred  and  twenty 
thousand  assessments,  and  an  examination  of  all  the  sales 
reported  for  the  year  in  that  county  to  the  Secretary  of  State 
shows  that  there  were  just  five  hundred  and  twelve  deeds  in 
which  the  real  and  true  consideration  is  stated  in  the  deed. 
Ho  more.  That  is  one  to  every  two  hundred  and  forty  as- 
sessments. 

How,  where  do  these  facts  bring  us  ? Is  it  in  any  way 
misstating  the  proposition  to  put  it  in  this  way:  You  have 

an  assessment  district  in  which  are  240  land  assessments,  say 
of  $1,000  each,  or  a total  assessment  of  $24-0,000.  In  that 
district  you  find,  during  the  year,  just  one  sale.  A lot  as- 
sessed at  $100  has  been  sold  for  $500.  Would  any  one  feel 
that,  upon  this  evidence  alone  as  to  how  assessors  were  as- 
sessing property  in  that  district,  this  entire  assessment  ought 
to  he  multiplied  by  five  and  he  made  $1,200,000,  instead  of 
$240,000  ? 

Would  it  do  to  apply  the  same  rule  to  the  assessment  of 
personalty  ? 

Suppose  a taxing  district  in  which  240  horses  are  reported 


85 


and  assessed  at  $50  each  on  the  average,  or  $12,000  in  the 
aggregate.  Then,  during  the  year,  suppose  you  have  evi- 
dence of  the  sale  of  one  horse  for  $100  which  has  been  as- 
sesssed  for  $20.  Is  that  sufficient  evidence  that  the  assessors 
are  only  assessing  horses  at  one-fifth  value,  and  would  it 
justify  you  in  multiplying  the  assessment  of  horses  by  five 
and  making  it  $60,000,  instead  of  $12,000,  in  that  district? 

Mr.  Dudley:  Suppose  that  was  the  only  data  you  had  on 

sales,  would  you  use  it  ? 

Mr.  Baldwin : Well,  I would  find  some  other  if  I could. 

I would  very  much  prefer  the  conclusions  of  value  of  your 
Appraisal  Company.  I would  place  greater  reliance  upon 
the  judgment  of  the  tax  supervisors  in  the  different  counties. 

Mr.  Dudley:  You  would  prefer  to  take  that  one  reliable 

sale  rather  than  to  take  the  one  plus  a certain  number  of 
erroneous  sales  added  to  it,  wouldn’t  you  ? 

Mr.  Baldwin : Yes,  I would.  But  it  seems  to  me  that 

the  basis  is  too  narrow.  It  is  not  sufficient  to  justify  us  in 
reaching  a conclusion  upon  that  evidence  alone.  The  dis- 
closures made  by  Mr.  Brown  seem  to  prove  beyond  question 
that  the  deeds,  of  which  a memorandum  is  filed  with,  the 
Secretary  of  State,  do  not,  upon  their  face,  show  the  real  con- 
sideration for  the  sale  except  in  the  case  of  about  one  sale 
to  every  two  hundred  and  forty  assessments,  which,  to  me  as 
a reasonable  individual,  does  not  appear  to  be  a basis  broad 
enough  upon  which  to  make  a land  assessment  for  the  entire 
State  of  Wisconsin.  There  ought  to  he  better  evidence. 

But  the  Commission  has  not  strictly  applied  this  method 
to  the  assessment  of  personalty.  On  page  66  of  1901  report 
you  say: 

“In  their  computations  the  Commission  first  calculated 
the  total  value  of  the  personal  property,  by  taking  the  aver- 


86 


age  ratio  of  assessed  valuation  to  actual  value  shown  by  real 
estate  in  each  assessment  district  (it  was  deemed  a fair  pre- 
sumption that  the  assessor  applied  to  personal  property,  or 
that  part  of  it  discovered  by  him,  the  same  ratio  that  he  ap- 
plied to  real  estate ),  then  adding  the  total  assessment  of  per- 
sonal property  in  each  district  for  five  years  and  taking  an 
average  of  that  and  applying  it  to  the  real  estate  ratio” 

Now  that  amounts  to  this,  as  I would  read  it:  Take  an 

assessment  district  in  which  there  are  240  horses  assessed 
at  $50  each,  or  in  the  aggregate  $12,000.  You  do  not  find 
what  one  horse  has  sold  for  and  what  it  was  assesssed  for, 
but  you  find  what  one  lot  sold  for,  or  one  farm  sold  for,  in 
that  assessment  district,  and  you  say : “We  find  that  a lot 

assessed  at  $200  has  been  sold  for  $1,000,  therefore  we  will 
multiply  the  assessment  of  horses  in  that  district  by  five.” 
That  is  carrying  the  thing  a step  further,  and  does  not  ap- 
peal to  my  judgment.  The  question  whether  in  the  mind  of 
each  assessor  in  the  state  it  was  intended  to  make  applica- 
tion to  all  the  personalty  of  the  very  same  deduced  ratio  that 
he  applied  to  real  estate,  is  a totally  different  question.  Are 
we  justified  in  making  so  important  a deduction  as  the  as- 
sessment of  all  the  personalty  in  the  State  of  Wisconsin  de- 
pend upon  such  a presumption  ? x\re  there  not  better 
methods  ? Are  there  not  better  tests  ? Are  there  not  sounder 
rules  by  which  we  can  be  guided  ? 

In  what  I may  say  regarding  the  true  method  of  con- 
sidering the  question  of  the  value  of  all  the  personal  property 
in  this  state  I shall  try  it  differently,  although  you  may  con- 
clude before  I finish  that  the  determination  of  the  value  of 
real  estate  is  an  exact  science,  compared  with  finding  the  true 
value  of  all  the  personalty. 


87 


Personal  Property  Omissions  and  Undervaluations. 

The  Commission  is  seeking  to  establish  a tax  rate  the 
ultimate  result  of  which  will  place  the  burden  of  taxation 
in  Wisconsin  upon  those  who  own  the  railroads  the  same 
as  it  is  being  carried  by  those  who  own  all  the  land,  and  all 
the  personalty  of  the  state.  This  is  being  worked  out  through 
the  process,  first,  of  ascertaining  the  full  true  value  of  all  the 
property  subject  to  taxation,  including,  of  course,  all  the 
personal  property. 

Can  we  find  such  true  value  of  all  the  property  in  this 
state  by  omitting  to  see,  or  refusing  to  consider,  the  half  of 
it — either  half?  The  proposition  shocks  our  sense  of  fair- 
ness and  cannot  be  accepted  unless  the  command  of  the  Con- 
stitution that  taxation  shall  be  uniform,  is  to  be  totally  disre- 
garded. 

Speaking  of  this  difficulty,  the  Commission,  on  page  65  of 
its  1901  report,  says: 

“It  has  been  stated  by  many  economists  and  statisticians, 
and  generally  accepted  as  truth  by  others,  that  taxable  per- 
sonal property  probably  exceeds  in  value  the  taxable  real 
property  in  all  the  older  states  and  equals  it  in  the  newer 
sections.  The  Tax  Commission,  while  not  prepared  to  dis- 
prove this,  has  proceeded  in  its  work  upon  the  hypothesis 
that  the  proposition  has  not  been  proven.  In  the  practical 
administration  of  tax  laws  at  the  present  time  it  is  apparent 
that  calculations  must  be  confined  to  personalty  that  actually 
finds  its  place  on  the  tax  rolls.  The  public  burden  falls  al- 
most exclusively  upon  the  personalty  found  on  the  rolls  and 
on  the  real  estate.  Taxes  are  levied  on  such  property,  and 
not  on  that  which  escapes.  It  is  so  everywhere  and  no  less 
in  Wisconsin  than  in  other  states.  Speculation  as  to  how 
much  escapes  will  not  make  up  the  deficiency,  nor  can  it  be 
contended  that  the  evasion  is  ground  for  lessening  the  just 
burdens  on  property  that  can  be  reached  ” 


88 


Now,  suppose  it  was  a practice  with  assessors  in  Wisconsin 
in  one  year  to  assess  only  the  odd-numbered  sections  of  land, 
and  the  odd-numbered  lots;  and  in  the  next  year  to  assess 
the  even-numbered  sections,  and  even-numbered  lots;  and 
suppose  that  such  a practice  was  not  so  repugnant  to  the  law 
hut  that  it  could  be  upheld.  You  have  before  you  the  ques- 
tion of  establishing  a tax  rate  that  shall  rest  upon  railroad 
property  the  same  as  it  rests  upon  the  general  property  of 
the  state.  Would  you  ignore  this  practice  ? Would  you 
simply  take  into  consideration  the  real  estate  you  find  for 
that  year  upon  the  tax  roll  ? No ; you  would  take  into  your 
account  all  the  real  estate,  whether  undervalued  or  omitted 
from  assessment.  In  any  taxing  district  if  you  found  one 
lot  that  was  omitted,  you  would  not  hesitate  to  insist  that  that 
lot  should  be  considered.  Why  ? Because  you  are  determin- 
ing under  the  Constitution  a broad  question  of  equality  in 
taxation.  You  have  before  you,  to  he  valued  by  yourselves 
alone,  a certain  class  of  property.  You  are  to  fix  a tax  bur- 
den upon  that  property:  nobody  else  is  to  do  that.  Aside 
from  the  fact  that  the  owners  of  the  real  estate  are  also  the 
owners  of  the  personalty,  there  is  the  further  important  fact 
that  they  select  those  who  list  and  assess  their  property.  If 
you  would  not  allow  wholesale  omissions  of  land  to  pass 
unheeded  in  considering  what  is  the  true  value  of  all  the 
general  property  of  the  state,  how  can  you  do  it  with  regard 
to  the  personalty  ? Suppose  that  assessors  deliberately  and 
habitually  omitted  all  personal  property  from  assessment  ? 
This  item  appears  to  me  to  indicate  such  a tendency:  Last 

year  there  were  50,646  watches  in  the  state,  assessed  at 
$643,000 ; this  year  there  are  5,513  watches,  assessed  at 
$135,262.  Perhaps  we  are  approaching  a condition  where 
all  personalty  is  to  he  ignored. 


89 


Mr.  Curtis:  You  remember  there  has  been  a remarkable 

change  in  the  law  in  regard  to  the  assessment  of  watches  be- 
tween 1903  and  1902. 

Chairman  Gilson:  They  are  all  exempt  unless  of  the 

value  of  fifty  dollars  or  over;  and  of  course  it  is  difficult  to 
find  a watch  worth  more  than  fifty  dollars.  In  1902  all 
watches  were  assessed. 

Mr.  Baldwin:  That  is  an  explanation  which  escaped  my 

notice.  Last  year  there  were  assessed  seventy-three  millions 
of  moneys  and  credits ; this  year  there  are  twenty-four  mil- 
lions. 

Mr.  Curtis  : You  are  aware  of  a great  change  of  the  law 
in  that  respect. 

Mr.  Baldwin : The  change,  as  I understand  it,  was,  that 

where  land  is  mortgaged,  and  the  mortgage  is  assessed,  the 
value  of  the  mortgage  shall  be  deducted  from  the  assessment 
of  the  real  estate. 

Mr.  Curtis : That  is  quite  different  from  what  the  law 

is.  Mortgages  are  assessed  as  an  interest  in  the  real  estate, 
and  do  not  appear  as  a personal  property  assessment. 

Chairman  Gilson : They  are  wholly  eliminated  from  the 

personal  property  assessment  where  they  are  upon  taxable 
real  estate.  There  are  a few  mortgages  on  non-taxable  real 
estate  where  they  would  he  on  the  personal  property  assess- 
ment; otherwise  all  mortgages  are  assessed  as  part  of  the 
interest  in  the  real  estate. 

Mr.  Baldwin:  Are  they  supposed  to  appear  in  the  real 

estate  assessment  ? 

Chairman  Gilson:  The  real  estate  assessment  is  the  same 

as  it  was  before.  It  appears  as  the  equity  of  the  mortgagor, 
and  the  interest  of  the  mortgagee. 


90 


Mr.  Baldwin : That  is,  through  the  operation  of  the  law 

this  tendency  to  omit  all  personalty  from  the  assessment  is 
being  accelerated. 

Chairman  Gilson : The  law  amounts  to  a practical  ex- 

emption of  mortgages  as  personal  property.  It  is  intended  to 
relieve  the  owner  of  the  premises  from  double  taxation. 

Mr.  Baldwin:  Such  an  interpretation,  I must  admit,  in- 

creases the  difficulty  of  forming  a correct  judgment  as  to  the 
true  amount  of  moneys  and  credits  which  you  ought  to  take 
into  consideration,  hut  that  duty  of  forming  a judgment  re- 
mains your  duty  notwithstanding  the  increased  difficulty. 

To  bring  out  the  point  as  to  palpable  and  intended  omis- 
sions more  clearly,  let  me  ask  this  question : Are  you  willing 
to  carry  the  suggestions  of  omission  from  assessment  one 
more  step? 

Simply  assume  that,  under  suitable  and  appropriate  legis- 
lative enactments,  combined  with  the  deliberate  and  sys- 
tematic action  of  the  assessors,  all  the  land  and  all  the  per- 
sonalty are  substantially  dropped  out  of  the  assessments — 
leaving  nothing  except  your  own  assessment  of  the  railroads 
— and  that  you  are  then  confronted  with  the  duty,  as  now,  of 
levying  upon  railroad  property  an  equal  and  uniform  tax 
rate,  which  will  result,  if  I may  again  quote  your  own  words, 
“in  equally  distributing  the  public  burden  among  all  the 
citizens  of  the  state,  according  to  their  property  or  ability 
to  pay.”  Such  a condition  is  before  you  this  very  day,  in 
fact,  as  to  two-thirds  of  all  the  personal  property  in  Wis- 
consin, and  the  wrong  and  injustice  of  it  will  appear  more 
and  more  clearly  as  the  vast  and  rapid  increases  in  wealth 
take  on  personal  property  forms — in  fact,  they  are  changing 
into  forms  of  personalty  more  and  more. 


91 


So  far  as  the  property  of  the  railroad  companies  is  con- 
cerned, what  is  then  to  become  of  their  constitutional  pro- 
tection of  equality  and  uniformity  of  taxation  ? 

The  True  Value  of  the  Taxable  Personal  Property 
of  Wisconsin. 

In  a communication  recently  submitted  by  a committee 
upon  taxation  of  the  business  men’s  association  of  the  City 
of  Boston,  they  made  this  declaration : “The  personal  prop- 

erty of  both  the  city  and  the  state  which  under  the  law  is 
subject  to  taxation,  can  not  be  less  than  twice  the  value  of 
the  real  estate.  Upon  this  all  writers  agree.”  I will  not  ask 
this  Commission  to  accept  that  principle,  nor  the  principle 
named  by  itself,  that  “taxable  personal  property  probably 
exceeds  in  value  the  taxable  real  property  in  all  the  older 
states,  and  equals  it  in  the  newer  sections.”  But,  I have  often 
observed  that  general  principles  of  this  character,  based  upon 
generations  of  human  experience  and  the  judgment  of  inde- 
pendent inquirers — such,  for  instance,  as  the  Gresham  Law 
in  finance — are  oftentimes  more  to  be  relied  upon  than  many 
of  these  things  we  say  we  can  prove  specifically.  I may  not 
be  able  to  prove  that  the  value  of  the  personalty  in  this  state 
is  equal  to  the  value  of  the  land,  however,  much  I believe  it. 
Wisconsin  is  a great  state.  It  is  a great  manufacturing  state. 
It  has  four  hundred  million  dollars  invested  in  manufac- 
tories ; more  than  three  times  the  capital  in  factories  that 
we  have  in  the  State  of  Iowa.  The  manufacturing  indus- 
tries of  Wisconsin  are  growing  wonderfully.  It  is  in  such 
states  that  the  proportion  of  personalty  to  realty  is  large. 
It  is  to  such  states  that  this  principle  or  rule  that  the  value 
of  the  personalty  exceeds  the  value  of  the  land  may  very 


92 


properly  apply.  You  have  in  Wisconsin  over  two  hundred 
million  dollars  of  bank  resources.  The  value  of  your  agri- 
cultural products  for  the  single  year  1900  was  reported  in 
the  census  at  over  one  hundred  and  sixty  millions  of  dollars ; 
the  value  of  logs  and  timber  products  over  fifty-seven  mil- 
lions; and  the  capital  employed  in  manufactures  three  hun- 
dred and  thirty  millions.  Where  do  these  vast  amounts  of 
wealth  and  greatness  appear  in  your  personal  property  as- 
sessment ? There  are  four  items : “Leaf  tobacco,”  one  mil- 

lion, seven  hundred  and  fifty  thousand  dollars ; “logs,  timber, 
ties,  etc.,”  twelve  millions  ; “bank  stock,”  twenty-two  mil- 
lions ; “moneys  and  credits,”  twenty-four  millions ; or  about 
fifty-nine  millions.  That  is  all.  Among  the  sources  of  the 
present  material  wealth  of  Wisconsin,  are  these  hundreds 
of  millions  in  value  and  of  all  this  taxable  personalty  I find 
fifty-nine  millions  assessed. 

But  I am  not  asking  that  a valuation  be  made  of  this  prop- 
erty upon  mere  generalities.  I am  admonished,  if  admoni- 
tion were  necessary,  by  the  suggestion  of  the  Commission 
that  “Speculation  as  to  how  much  personal  property  escapes 
assessment  wdll  not  make  up  the  deficiency.  ” If  I can  not 
point  out  where  it  escapes,  and  how  it  escapes,  I do  not  ask 
the  Commission  to  indulge  in  mere  speculation  upon  this 
subject. 

The  assessors  returned  a personalty  assessment  of  1903, 
for  the  whole  state,  of  two  hundred  and  thirty-eight  millions 
of  dollars.  The  Commission,  in  its  October  valuation,  in- 
creased that  to  four  hundred  and  forty-three  millions.  That 
we  understand  to  be  a purely  tentative  estimate  and  for  an 
adjustment  of  the  state  tax  and  having  nothing  to  do  with 
your  estimate  of  the  total  personalty  which,  together  with 
the  real  estate,  is  to  constitute  the  “general  property”  sub- 


93 


ject  to  taxation,  from  which  you  are  to  establish  an  average 
rate  to  be  applied  to  railroad  valuations.  That  estimate,  as 
I said,  is  as  yet  entirely  undetermined.  To  decide  what  it 
ought  to  be  is  what  this  hearing  is  for.  The  assessors  re- 
turned personal  property  to  the  aggregate  of  two  hundred 
and  thirty-eight  millions  and  you  raised  it  in  October  to 
four  hundred  and  forty-three  millions.  That  amounts  to 
saying  that,  for  the  October  purposes,  you  would  regard  the 
state  assessment  of  personal  property,  as  of  date  May  1, 
1903,  to  be  equal  to  fifty-three  per  cent,  of  true  value  of  the 
personalty.  In  my  opinion,  based  upon  the  best  thought  I 
have  been  able  to  give  the  subject,  it  does  not  exceed  thirty 
per  cent,  of  true  value.  I believe  the  Commission  will  be 
guided  by  the  facts.  Some  of  the  facts  wThich  have  influenced 
my  judgment  have  been  furnished  by  the  Commission  itself. 
That  is  simply  a further  acknowledgment  of  the  debt  which 
the  people  of  the  state  owe,  and  all  those  interested  in  this 
question  owe,  to  the  work  of  the  Commission. 


Valuation  of  Peopekty  of  Estates  of  Decedents. 

I ask  to  recall  your  attention  to  the  investigation  which  you 
made  of  the  assessment  of  the  property  of  decedents’  estates. 
You  investigated  over  eleven  hundred  estates,  in  seven  dif- 
ferent counties,  and  covering  eight  millions  of  property;  and 
those  results  are  embodied  in  the  table  at  page  128  of  your 
1901  report.  This  table  shows  that  those  estates  had  per- 
sonal property  with  an  appraised  value  of  about  eight  mil- 
lion dollars;  and  that  out  of  that  there  was  $248,000  prop- 
erly exempt  on  account  of  debts,  and  $2,696,088  taken  out  on 
account  of  “other  exemptions,”  so  that  there  was  left,  prop- 
erly subject  to  taxation,  $5,023,860.  This  was  assessed  at 


94 


$1,131,000  or  twenty-five  per  cent,  of  appraised  value.  A 
large  portion  of  this  total  was  “intangible”  personalty — 
stocks  and  bonds  and  cash.  I have  carefullv  read  and 

c / 

largely  sympathize  with,  the  views  of  the  Commission  about 
how  much  of  that  intangible  property  should  be  cousidered 
in  estimating  the  true  value  of  estates.  Part  of  it  might  be 
stock  in  a Wisconsin  corporation,  which,  by  law,  is  exempt 
from  taxation,  as  such.  But,  if  you  throw  out  every  dollar 
of  the  intangible  property,  you  have  an  assessment  upon  the 
remainder  of  only  thirty  per  cent.  Upon  page  131  of  the 
Report,  you  say : “Including  Milwaukee  County  but 

omitting  the  one  estate  referred  to,  the  ratio  of  appraised  in- 
tangible personalty  to  the  whole  personal  appraisement  is 
about  91  per  cent,  and  the  ratio  of  the  assessment  of  same 
to  the  whole  appraisement  is  9 per  cent.,  while  the  ratio  of 
appraised  tangible  personalty  to  the  whole  appraisement  is 
10  per  cent.,  and  of  the  assessment  of  same  to  the  whole  ap- 
praisement is  3.5  per  cent. ; or,  making  the  comparison  in 
another  way,  we  find  that  of  the  appraised  intangible  per- 
sonalty (which  is  90  per  cent,  of  the  whole)  only  5.5  per 
cent,  was  assessed,  while  of  the  appraised  tangible  personalty 
(which  is  but  10  per  cent,  of  the  whole)  almost  SI  per  cent, 
appears  on  the  assessment  rolls.”  So  that  if  you  ignore  every 
dollar  of  intangible  property  that  belongs  to  those  estates, 
you  have  only  30  per  cent,  of  the  actual  tangible  property, 
after  throwing  out  all  exemptions  of  every  character,  upon 
which  there  is  any  assessment  for  taxation. 

One  word  in  regard  to  appraisement  of  estates.  It  is  un- 
doubtedly true,  as  the  Commission  says:  “The  values  set 

by  appraisers  in  the  County  Courts  are  quite  conservative 
and  lower  rather  than  higher  than  the  prices  which  could  be 
obtained  for  the  same  property  at  private  sale.  Adminis- 


95 


trators  and  executors  quite  generally  desire  a low  appraise- 
ment, so  that  when  their  final  account  is  rendered  there  may 
he  no  loss  shown  from  inventoried  prices,  and  appraisers,  we 
presume,  are  somewhat  influenced  by  this  desire  of  the  ad- 
ministrators and  executors.” 

That  is  true,  and  more,  because  in  my  experience  there  is 
another  motive  much  more  powerful  than  that  suggested  by 
the  Commission,  and  that  is  this  very  tax  feature.  These 
estates  are  in  process  of  winding  up,  and  the  personal  prop- 
erty in  the  hands  of  executors  on  the  first  of  May,  each  year, 
ought  to  be  subject  to  assessment.  They  may  continue  as 
executors  for  years.  It  is  my  recollection  that  in  the  City 
of  Chicago  many  estates — for  instance  the  Pullman  estate — 
turned  out  to  be  double  the  appraisement.  That  was  largely 
to  avoid  taxation.  Those  in  charge  of  estates  are  governed 
by  the  same  kind  of  selfishness  as  other  mortals. 

We  must  all  die  and  our  estates  be  probated,  if  we  have 
any.  Your  investigation  only  covered  thirteen  hundred 
estates,  scattered  through  seven  counties.  But  there  is  not 
a reason  on  earth  for  thinking  that  a state-wide  investigation 
would  not  disclose  similar  facts.  It  amounts  to  this:  Ex- 

cluding every  dollar  of  intangible  property,  and  considering 
tangible  property  only,  the  probating  of  every  man’s  estate 
in  Wisconsin  will  show  that  his  personal  property  is  only  as- 
sesssed  for  taxation  at  thirty  per  cent,  of  its  appraised  value, 
which  is  decidedly  less  than  the  true  value. 

If  that  is  true  of  his  estate  when  he  is  dead,  it  is  equally 
true  of  his  estate  when  he  is  living.  Can  you  shut  your 
eyes  to  such  evidence?  If  you  believe  upon  facts  like  these, 
that  there  is  a systematic  and  universal  method  in  force 
among  Wisconsin  assessors,  through  which  the  tangible,  vis- 
ible, physical  personal  property  of  the  state  is  assessed,  as  a 


96 


whole,  at  not  over  thirty  per  cent,  of  its  value,  how  can  you 
in  good  conscience  and  under  the  law  fail  to  place  upon  the 
two  hundred  and  thirty-eight  millions  which  they  have  thus 
partially  assessed,  a true  valuation  of  seven  hundred  and 
ninety  millions  ? This  ignores  the  whole  immense  volume  of 
intangible  personal  property  which  all  concede  is  not  assessed 
at  six  per  cent,  of  its  true  value. 


The  Assessment  of  Merchandise  Stocks. 

I frankly  acknowledge  the  obstacles  in  the  path  of  this 
investigation  into  the  true  value  of  all  the  personalty  in  a 
great  state  like  Wisconsin.  We  have  no  power  to  re-assess 
property ; we  have  no  official  authority  whatever.  The  Com- 
mission has  wide  authority.  All  that  we  can  do  is  to  present 
to  the  Commission  such  evidence  hearing  upon  values  as 
seems  to  us  authentic  and  reliable;  it  is  for  you  to  weigh 
and  sift  and  estimate. 

This  line  of  investigation  occurred  to  us,  regarding  one 
important  class  of  tangible  personal  property — the  merchan- 
dise stocks — that  we  apply  to  the  Commercial  Agency  which 
for  many  years  has  been  engaged  in  the  business  of  under- 
taking to  find  out  the  true  value  of  the  stocks  of  merchandise 
of  persons  in  business  who  seek  credit,  and  whose  places  of 
business  are  in  Wisconsin.  This  agency  did  not  then  and 
does  not  now  know  for  what  purpose  this  information  was 
asked.  And  with  regard  to  all  the  information  which  we 
have  sought  to  place  before  the  Commission  I think  that  you 
will  agree  that  we  have  acted  impersonally,  and  in  good  faith. 

It  was  manifestly  impossible  for  us  to  obtain  from  the 
Commercial  Agency  figures  as  to  values  identically  on  the 
first  of  May,  1903.  All  we  could  do  was  to  say  to  them,  “We 


97 


want  the  last  reports  you  have.”  The  Burlington  Company 
is  a subscriber  to  this  Commercial  Agency  and  has  been  for 
many  years.  I wrote  to  the  manager  and  said  that  I wished 
to  know  the  values  of  the  stocks  of  merchandise  in  the  City 
of  Madison  and  in  the  City  of  Milwaukee,  stated  separately, 
and  then  also  in  the  whole  State  of  Wisconin.  I requested  a 
statement  from  them  as  to  the  method  they  employ  in  ascer- 
taining these  values.  The  reply  is  dated  January  5,  1904, 
and  is  as  follows: 

“The  figures  which  we  have  given  represent  the  average 
standing  stocks  of  merchandise  in  the  State  of  Wisconsin. 
The  data  come  from  reports  covering  the  entire  year  of 
1903,  and  the  figures  were  also  weighed  with  those  of  the 
year  previous,  as  a check  against  possible  discrepancies.  In 
no  other  way  could  the  estimates  have  been  compiled,  as  the 
reports  were  variously  dated  from  the  beginning  of  the  year 
up  to  the  time  the  work  was  started.  Nothing  was  consid- 
ered except  tangible,  physical  stocks  of  merchandise.  This 
we  understood  was  the  only  thing  desired.  You 
ask  us  to  inform  you  in  detail  how  the  information  is  se- 
cured by  this  agency,  and  how  we  finally  record  the  true 
value  of  the  stocks.  It  would  indeed  be  a difficult  matter  to 
answer  these  questions  comprehensively,  without  going 
through  a great  deal  of  tedious  and  lengthy  detail.  While 
we  do  have  a general  method,  almost  every  case  requires  spe- 
cial treatment,  and  a deviation  from  the  general  rule.  In 
cases  where  the  parties  make  statements,  efforts  are  always 
made  to  confirm  the  values,  from  well  informed  and  inde- 
pendent sources.  In  some  instances  authorities  have  no 
close  knowledge,  and  base  their  acceptance  of  statements  on 
their  estimates  of  the  parties’  integrity  and  reputation  for 
conservativeness.  It  is  not  difficult  in  either  large  or  small 
places  to  detect  gross  overvaluations  made  for  the  purpose  of 
bolstering  worth.  The  means  by  which  we  discover  these 
misrepresentations  are  various.” 

“Where  statements  are  not  obtained,  the  estimates  of 
merchandise  are  made  by  correspondents,  who  are  best  ac- 
quainted with  the  merchant  reported.  Frequently  the  fig- 


98 


ures  given  represent  an  average  struck  from  several  opin- 
ions.” 

They  reported : “There  are  eight  hundred  persons  engaged 
in  mercantile  business  in  the  City  of  Madison,  and  the  value 
of  their  stocks  of  merchandise  is  $2,875,345.”  The  assess- 
ment for  taxation  in  1903  upon  those  same  stocks,  by  the  as- 
sessors, is  $681,091. 

Mr.  George  R.  Peck:  Are  those  reports  made  up  by  the 

commercial  agency  from  statements  of  the  merchants  them- 
selves ? 

Mr.  Baldwin:  Yes,  and  from  investigations  they  make. 

Mr.  George  R.  Peck:  They  originate  from  the  merchants 
themselves,  so  as  to  have  a standing  fixed  by  which  they  can 
get  credit. 

Mr.  Baldwin : Yes.  This  is  to  be  said : if  a man  was  ex- 
pecting to  have  a fire,  or  to  sell  out,  he  might  exaggerate. 
All  that  is  to  be  considered.  But  this  is  a useful  statement 
of  value,  and  an  underestimate,  so  far  as  the  whole  state  is 
concerned.  In  the  City  of  Madison  the  assessment  of  mer- 
chandise stocks  is  24  per  cent,  of  their  value. 

Chairman  Gilson : Does  that  relate  exclusively  to  mer- 

chandise, or  does  it  relate  to  total  assets  ? Do  they  separate 
those  things,  always,  in  their  reports  % 

Mr.  Baldwin:  Yes,  they  do.  I went  to  their  office  in 

Chicago  and  examined  particularly  as  to  that.  “Capital” 
is  one  question,  and  the  actual  “stock  of  goods”  another. 
Nothing  was  considered  except  tangible,  physical  stocks  of 
merchandise.  This  was  the  only  thing  desired.  When  it 
comes  to  “capital”  values,  and  what  the  merchant  is  earning, 
or  what  his  valuation  would  be  if  his  merchandise  was  put 
into  a corporation  and  the  stock  of  such  corporation  was 


99 


quoted  on  the  Stock  Exchange — such  a mode  of  estimating 
values  is  only  for  the  railroad;  it  is  not  for  the  merchant. 
If  that  test  was  applied  it  would  make  a very  different  show- 
ing. But  there  is  nothing  reported  here  except  physical 
stocks  of  merchandise. 

Mr.  Dudley:  That  does  not  include  any  estimate  of  the 

value  of  stocks  which  are  not  reported  ? 

Mr.  Baldwin:  No.  That,  now,  is  your  information,  and 

at  your  service;  you  have  all  the  powers  of  the  state  to  in- 
quire here  in  the  City  of  Madison  whether  the  statements 
are  true  or  not.  We  have  not. 

In  the  City  of  Milwaukee  there  are  6,794  mercantile  es- 
tablishments, which  have  $57,073,096  of  value  in  stocks  of 
goods.  They  are  assessed  for  taxation  at  $15,100,915,  or 
26  per  cent,  of  their  value. 

The  remainder  of  the  state  is  more  fairly  assessed  on 
stocks  of  merchandise  than  Madison  and  Milwaukee.  The 
total  merchandise  stocks  in  the  state,  as  reported,  have  a 
value  of  $179,820,902,  in  54,549  different  establishments. 
They  are  assessed  at  $61,574,536  for  1903,  or  34  per  cent, 
of  their  value. 

Mr.  T.  A.  Polleys : That  schedule  is  headed  “Merchants, 

and  Manufacturers’  Stocks.”  This  includes  absolutely  noth- 
ing but  merchants’  stocks. 

Mr.  Baldwin:  That  is  as  I understand  it. 

Chairman  Gilson:  You  include  all  who  have  merchan- 

dise on  hand ; people  who  are  seeking  credit.  That  would 
include  the  stock  of  lumber  of  a manufacturing  concern, 
would  it  not  ? 

Mr.  Baldwin : No}  I don’t  think  it  would. 

Mr.  Curtis:  The  assessment  figures  that  you  are  giving 


100 


in  connection  with  this  data  are  the  assessment  figures  of 
1903? 

Mr.  Baldwin:  Yes;  $61,574,536. 

Mr.  Curtis:  Does  that  appear  on  the  face  of  the  mat- 

ter which  you  submit  ? 

Mr.  Baldwin:  Yes.  We  know,  of  course,  that  there  are 

a large  number  of  small  dealers  not  so  important  that  their 
business  finds  a place  upon  the  books  of  a commercial 
agency.  It  is  a reasonable  and  fair  conclusion  from  the 
evidence  that  the  value  of  merchandise  stocks  in  Wisconsin 
is,  at  least,  two  hundred  million  dollars.  This  is  very 
strong  corroboration  of  what  you  yourselves  have  announced 
from  the  evidence  of  the  probate  records,  that  the  prevailing 
ratio  of  assessment  upon  tangible  personal  property  in  the 
state  does  not  exceed  thirty  per  cent,  of  its  true  value. 

The  following  is  the  table  for  merchandise  stocks: 


MERCHANDISE  STOCKS  FOR  1903. 


(WISCONSIN.) 


Number  of 
Merchants 

Value  of  Stocks 
on  Hand 

;Assement  of 
same  Stock  for 
Taxation 

Percentage  of 
Assessment  to 
Value 

Madison 

800 

$ 2,875,345 

$ 681,091 

24 

Milwaukee 

6,794 

57,073,096 

15,100,915 

26 

Entire  State 

54,549 

179,820,902 

61,574,536 

3-t 

THE  LIVE  STOCK  ASSESSMENT. 

My  investigations  convince  me  that,  as  compared  with 
1900,  there  has  been  in  1903  a substantial  increase  in  the 
assessment  upon  Wisconsin  live  stock,  on  a basis  of  value — 
a greater  approximation  towards  true  value. 


101 


This  table  shows  the  valuation  for  Wisconsin  upon  live 
stock  appearing  in  the  census  reports  for  the  year  1900, 
and  the  assessment  upon  the  same  classes  of  live  stock  for 
the  same  year  (1900)  : 

LIVE  STOCK  CENSUS  VALUATION  COMPARED 
WITH  ASSESSMENT  OF  1900. 


Horses — 

Census. 

Assessment. 

^Number  . . . . 

641,493 

471,000 

Valuation  . . . 

$39,772,560 

$14,928,000 

Average  Value  . 

$61.75 

$31.67 

Neat  Cattle — 

Number  

2,314,105 

1,482,700 

V aluation  .... 

$46,849,418 

$18,162,000 

Average  Value  . 

$20.25 

$12.92 

Sheep  and  Lambs — 

Number 

1,675,453 

884,120 

Valuation  . . . 

$4,510,356 

$1,398,000 

Average  Value  . 

$2.69 

$1.58 

Swine — 

Number 

2,014,000 

562,330 

Valuation  . . . 

$7,580,423 

$1,706,740 

Average  Value  , 

$3.76 

Census  Valuation. 

$3.03 

Assessment  (1900 

Total  Live  Stock  in 

Wisconsin.  $98,712,757 

$36,194,740 

Those  figures  would  indicate  that  in  1900  the  live  stock 
assessment  was  about  36  per  cent,  of  value,  but  the  census 
figures  on  value  are  not  at  all  exact  or  reliable,  if  you  ascer- 
tain values  from  what  live  stock  was  selling  for  in  the  mar- 
kets in  1900.  I do  not  know  where  the  census  people  got 
their  figures ; I have  no  means  of  knowing  what  investiga- 
tions they  made  into  market  values. 


*The  number  of  horses  includes  85,737  “not  on  farms.” 


102 


Chairman  Gilson : They  got  them  in  the  same  way,  I 

suppose,  that  the  commercial  agency  got  the  amount  of  the 
stocks  of  merchandise  in  this  state,  from  the  statement  that 
the  owners  made,  in  the  one  case  to  the  commercial  agency, 
and  in  the  other  to  the  enumerators ; being  the  value  fixed 
on  such  property  by  the  owners. 

Mr.  Baldwin:  I have  here  accurate  information  as  to 

true  values  of  live  stock  in  1900,  based  upon  sales  actually 
made  in  the  market.  The  Illinois  State  Board  of  Agricul- 
ture made  an  official  statistical  report  for  the  year  1900, 
showing  that  in  that  year  83  per  cent,  of  the  whole  number 
of  hogs  assessed  in  Illinois  by  local  assessors  were  actually 
sold  and  marketed;  that  the  number  sold  was  2,248,000; 
and  the  average  live  weight  was  225  pounds,  and  the  aver- 
age price  received  was  $4.35  per  hundred,  or  an  average 
price  of  $9.78  per  hog.  That  was  in  the  Chicago  stock  mar- 
ket, which  is  not  tkt*  same  thing  as  the  farm  price  in  Wis- 
consin. 

Mr.  Curtis:  Wasn’t  that  also  after  the  hog  had  been 

taking  in  corn  from  some  time  in  May  until  September,  in 
the  autumn  ? 

Mr.  Baldwin:  I do  not  know.  I have  no  doubt  that  the 

value  of  the  hog  in  Chicago  was  greater  than  the  value  in 
Wisconsin;  and  that  the  test  of  value  in  Wisconsin  was  not 
solely  the  price  at  which  the  animal  sold  for  in  Chicago. 
It  costs  something  to  sell  it;  the  commissions  and  freight 
charges  amount  to,  perhaps,  $1.50  per  hog.  But  taking 
everything  into  consideration,  an  average  value  of  $8  for 
swine  in  Wisconsin,  in  the  year  1900,  based  upon  actual 
sales,  would  be  a low  value. 

Mr.  Curtis:  For  the  autumn  valuation,  in  the  market. 


103 


Mr.  Baldwin : My  estimate  was  on  the  May  valuation. 

A valuation  of  horses  in  Wisconsin,  in  1900,  of  $80  per 
head  is  a fair  and  conservative  estimate. 

There  were  sold  in  the  Chicago  stock  market  in  1900, 
462,197  cattle,  all  grades  of  cattle,  from  Wyoming,  and 
Texas,  and  elsewhere,  and  the  average  price  was  $47.79 
per  animal.  An  estimate  of  $30  each  for  cattle  in  Wiscon- 
sin is  fair. 

If  these  prices  for  live  stock  were  applied  to  the 
Census  figures  for  1900,  the  true  value  was  $141,880,939, 
for  those  classes,  instead  of  $36,194,740;  that  is,  the  as- 
sessment was  at  25  per  cent,  of  value  in  that  year. 

I have  said  that  the  live  stock  assessment  for  1903  is  upon 
a much  fairer  basis  than  in  1900. 

In  1900  that  assessment  was  $36,000,000;  in  1903  it  is 
$73,000,000  in  the  aggregate. 

In  1900  the  assessors  made  an  assessment  upon  73  per 
cent,  of  the  horses,  64  per  cent,  of  the  cattle,  53  per  cent, 
of  the  sheep,  and  28  per  cent,  of  the  hogs  that  were  actually 
alive  and  in  Wisconsin,  if  the  Census  figures  as  to  numbers 
are  reliable,  and  this  question  seems  to  me  very  pertinent: 
Where  did  the  Census  enumerators  find  the  hogs,  and  the 
horses,  and  the  cattle  which  they  enumerated  ? They  found 
them  upon  the  farms,  and  it  is  impossible  to  think  that  the 
assessors  could  not  also  have  found  them  if  they  had  not, 
with  deliberation,  shut  their  eyes. 

What  were  the  fair,  just  and  reasonable  values,  the  Wis- 
consin prices,  of  Wisconsin  live  stock  in  May,  1903  ? 

I hold  in  my  hand  the  Live  Stock  Report  for  1903,  of  the 
Union  Stock  Yards  Company,  of  Chicago,  the  greatest  live 
stock  market  in  the  world.  I wrote  last  week  to  one  of  the 


104 


official  managers  of  that  company  a letter  from  which  I will 
read : 

“The  problem  we  are  seeking  to  solve  is  this:  What  was 

the  fair  value  in  Wisconsin  in  May,  1903,  per  head,  of  the 
horses,  cattle,  sheep  and  swine  ? The  assessors,  in  their  1903 
assessment,  fix  $59.32  per  head  for  the  horses;  $18.32  for 
the  cattle;  $2.27  for  the  sheep  and  lambs;  and  $6.51  for  the 
swine.  Taking  your  knowledge  of  the  markets,  and  the 
cost  of  marketing  from  Wisconsin,  will  you  kindly  give  me 
your  best  judgment  as  to  what  price  per  head  should  fairly 
and  honestly  be  stated  for  these  classes  of  live  stock  in  Wis- 
consin for  the  month  of  May,  1903  V 9 

The  quoted  official  prices  for  horses  in  Chicago  in  May, 
1903,  were  as  follows:  Draft  horses,  average  price,  $175; 

carriage  horses,  $240 ; drivers,  $155  ; for  general  use,  $125 ; 
bussers  and  trammers,  $145;  saddlers,  $170;  and  “southern 
chunks,”  $65. 

Mr.  Haugen:  There  are  no  data  given  as  to  young  ani- 

mals ? 

Mr.  Baldwin:  Ho,  sir. 

How,  in  the  Chicago  stock  yards  there  are  dealers  who 
trade  exclusively  in  Wisconsin  stock,  that  is,  stock  which 
is  shipped  in  there  from  Wisconsin,  as  there  are  others  who 
deal  in  Texas  stock  only,  and  Iowa  stock  only.  My  in- 
formant applied  to  the  dealers  in  Wisconsin  stock  for  a cor- 
rect answer  to  my  questions,  and  has  sent  to  me  the  fol- 
lowing statement  of  the  fair  market  prices  per  head  of  live 
stock  in  Wisconsin,  in  May,  1903,  and  also  the  Chicago 
prices,  as  follows: 


CHICAGO  WISCONSIN 

VALUE.  VALUE. 

Cattle $ 44.75  $ 34.00 

Hogs 13.62  11.00 

Sheep 4.05  3.50 

Horses 133.75  123.00 


105 


I have  made  a calculation  of  the  fair  valuation  of  live 
stock  in  Wisconsin  on  May  1 , 1903,  estimating  the  true 
numbers  on  the  basis  of  the  census  figures,  as  applying 
to  1903,  and  taking  a value  for  horses  of  $80,  for  cattle 
$30,  for  sheep  $3,  and  for  hogs  $8,  and  upon  such  calcu- 
lation the  valuation  amounts  to  $171,032,000,  the  assess- 
ment being  $73,391,153. 

Mr.  Haugen : When  he  says  “in  Wisconsin/’  does  he 

mean  in  Milwaukee  or  at  the  farm? 

Mr.  Baldwin:  He  says,  “In  Wisconsin.” 

Chairman  Gilson:  His  judgment  in  regard  to  the  value 

of  these  various  animals  is  formed  from  the  animals  that 
are  marketed  in  Chicago ; and  he  calculates  how  much  less 
they  would  be  worth  in  Wisconsin  before  being  shipped 
there. 

Mr.  Baldwin : Yes ; and  I think  we  should  take  this 

into  consideration:  that  this  inquiry  was  made  of  intelli- 
gent people,  who  have  acquired  ability  and  knowledge  as 
to  market  prices  in  the  course  of  many  years  experience. 

I hold  in  my  hand  the  statistical  reprint  from  the  year 
book  of  the  Department  of  Agriculture,  for  1902,  which  is 
issued  by  the  government.  This  gives  the  average  price 
of  horses  in  Wisconsin,  the  farm  price  of  horses  in  Wis- 
consin, for  the  year  1902,  at  $79.  It  also  gives  the  number 
and  average  price  and  total  value  of  hogs  in  every  state 
on  the  first  of  January,  1903.  It  states  that  in  the  State 
of  Wisconsin,  on  January  1,  1903,  there  were  1,686,885 
hogs,  as  against  613,000  found  by  the  assessors,  of  the 
average  farm  value  of  $8.98  a head,  or  $15,148,227,  as  com- 
pared with  less  than  $4,000,000  found  by  the  assessors, 

Mr.  Curtis : In  taking  your  numbers  you  assumed,  did 


106 


you,  as  the  census  I suppose  assumes,  that  all  the  sucklings 
are  counted  in  ? 

Mr.  Baldwin : I do  not  believe  that  they  would  rate 

suckling  pigs  at  $8.98.  That  cannot  be  the  same  sort  of 
animals. 

Mr.  Curtis:  In  giving  your  count,  did  you  assume  that 

the  census  count  takes  in  the  sucklings  or  excludes,  them  ? 

Mr.  Baldwin : I took  the  census  count  as  it  is. 

Mr.  Curtis:  If  it  does  include  the  sucklings  and  old 

plugs,  then  you  would  revise  your  figures  as  to  the  average 
value  ? 

Mr.  Baldwin:  Is  there  any  reason  to  believe  that  among 

the  seventeen  hundred  thousand  hogs  on  the  first  of  January, 
1903  found  by  the  government  officials  who  made  the  in- 
vestigation, estimated  by  them  in  Wisconsin  at  nine  dollars 
a head,  they  included  pigs  ? 

Mr.  Peck:  Suppose  they  did;  the  government  estimate 

shows  that  the  average  of  the  whole  is  so  much. 

Mr.  Baldwin:  $13.62  was  the  true  market  price. 

Mr.  Bowers : That  would  make  the  average  higher. 

Chairman  Gilson:  The  census  divides  live  stock  into 

the  various  ages.  They  are  not  all  given  under  one  head. 
You  will  find  those  of  a certain  age,  say  under  two  years  of 
age,  and  so  on. 

Mr.  Polleys:  That  is  true  of  cattle,  but  not  of  swine. 

Mr.  Dudley:  I don’t  think  there  are  many  sucklings  in 

existence  January  first. 

Mr.  Curtis:  Is  there  anything  to  show  that  the  govern- 

ment estimate  is  made  upon  any  census  made  as  of  the  date 
mentioned,  January,  1903? 

Mr.  Baldwin:  I cannot  tell. 


107 


Mr.  Curtis : Is  it  possible  for  it  to  contain  those  figures 

and  to  have  been  compiled  and  printed  at  this  date  ? 

Mr.  Baldwin  : For  1903  ? 

Mr.  Curtis : Oh,  yes ; that  is  a year  ago. 

Mr.  Baldwin : They  have  a corps  of  correspondents,  and 

the  Agricultural  Department  has  certain  sources  of  informa- 
tion upon  which  it  relies. 

This  same  statistical  government  report  contains  tables 
showing  the  following: 

“Acreage,  production,  value  and  distribution  of  corn, 
wheat,  oats,  etc.,  in  the  United  States,  and  the  stocks  on 
hand  in  the  hands  of  farmers  in  the  various  states  on  March 
1,  1903,  and  the  value  per  bushel.” 

From  these  official  tables  I have  compiled  the  following: 

WISCONSIN  AGRICULTURAL  PRODUCTS. 

AMOUNT  IN  THE  HANDS  OF  FARMERS  MARCH  1,  1903. 

Total  Production—  On  Hand  Value  per 


Bushels  Value  March  1, 1903  Value  Bushel 

Corn 42,000,000  $21,000,000  13,000,000  $ 6,500,000  $ .50 

Wheat 9,600,000  6,100,000  3,600,000  2,304,000  . 64 

Oats 94,000,000  28,500,000  40,000,000  12,000,000  *30 

Barley  16,500,000  7,600,000  3,800,000  1,750,000  .46 

Rye  6,209,000  3,104,000  1,600,000  800,000  .50 

Potatoes 28,752,000  9,500,000  3,000,000  1,000,000  .33 

Hay 3,268,000  tons  25,854,000  1,200,000  tons  9,492,000  pr  ton  7.91 

Tobacco 64,800  tbs.  4,500,000  1,800,000  prlb  .07 


$35,646,000 

How,  where  does  all  that  appear  in  the  assessment  on  May 
1,  1903  ? 

Mr.  Curtis : How  much  would  you  estimate  of  the  stock 

would  be  depleted  two  months  later? 

Mr.  Baldwin:  You  can  form  as  good  an  estimate  of  that 
as  I.  Of  that  thirty-six  millions  of  value  in  farmers’  hands 
March  1,  1903,  I find  in  this  assessment  $1,754,250,  the 
value  of  “leaf  tobacco,”  and  absolutely  nothing  else.  Why 


108 


there  is  a return  made  of  leaf  tobacco,  and  no  other  farm 
product,  I do  not  know. 

Mr.  Curtis : The  law  does  not  require  these  miscellaneous 
farm  products  to  be  reported  under  specific  heads.  They 
are  under  the  head  “All  other  property”  if  at  all. 

Mr.  John  Murphy:  Where  was  this  grain  stored  accord- 

ing to  government  reports  ? 

Mr.  Baldwin : It  was  reported  as  “in  the  hands  of  the 

farmers,”  on  the  first  of  March,  1903 — $35,646,000  of  farm 
value. 

Mr.  John  Murphy:  Hot  in  the  elevators? 

Mr.  Baldwin:  Ho. 


The  Assessment  of  Moneys  and  Credits. 

Regarding  a proper  valuation  of  moneys  and  credits  there 
is  certainly  much  less  exactness.  I have  read  with  interest 
and  profit  the  discussion  of  the  Commission  in  its  1903  re- 
port, upon  the  taxing  of  credits  generally,  and  of  taxing 
capital  stock,  the  mere  representative  of  property. 

I am  probably  more  in  accord  than  I am  in  discord  with 
many  of  your  views.  But  there  remains  your  law  which, 
barring  the  changes  as  to  the  assessment  of  mortgage  credits 
upon  taxable  lands,  still  requires  you  to  determine  what, 
according  to  your  best  judgment,  based  upon  the  evidence, 
is  the  fair  amount  of  moneys  and  credits  in  Wisconsin  which 
ought  to  be  considered  in  estimating  the  total  general  prop- 
erty of  the  state. 

As  I have  said,  you  have  a banking  capital  of  two  hun- 
dred millions,  and  a manufacturing  capital  of  four  hundred 
millions,  and  you  are  a prosperous  commercial  and  manu- 


109 


factoring  state,  in  which  money,  and  taxable  credits,  as  a 
form  of  property,  are  great  forms  of  wealth.  In  Massachu- 
setts they  assess  five  hundred  millions  of  bank  deposits. 
You  have  about  one  hundred  and  fifty  millions  of  bank  de- 
posits in  Wisconsin. 

Chairman  Gilson:  When  you  speak  of  bank  capital  you 

speak  of  deposits,  do  you  ? 

Mr.  Baldwin:  Yes;  I include  them.  If  a man  has  his 

fortune  in  cash  he  is  protected  by  law,  and  ought  to  pay 
taxes.  In  the  present  state  of  the  law,  that  is  fair  and  it  is 
fair  for  you  to  consider  it. 

In  the  course  of  your  work  you  have  made  some  elaborate 
tables  as  to  the  amount  of  moneys  and  credits  placed  upon 
the  tax  rolls  in  different  communities.  One  table  especially 
interested  me — that  which  is  shown  on  page  112  of  your 
1903  report.  In  that  table  it  appears  (in  the  groups  6,  7 
and  8,  of  assessment  districts)  that  assessors  of  the  smaller 
towns,  aggregating  nearly  260,000  population,  do  actually 
assess  moneys  and  credits  to  the  extent  of  $78.06  per  capita, 
or  a total  of  $20,276,000.  This  is  not  one  community,  but 
scores  of  widely  scattered  Wisconsin  communities  ; not  one 
assessor,  but  many.  It  seems  to  indicate  that  in  practically 
all  the  smaller  towns  of  Wisconsin  there  is  an  assessment 
of  moneys  and  credits  approximating  $100  per  capita.  Why 
do  not  assessors  in  the  larger  towns  and  in  the  cities  where 
the  intangible  wealth  abounds  find  an  equal  amount  for  as- 
sessment? Do  you  doubt  that,  even  in  these  communities, 
representing  260,000  people,  this  per  capita  assessment  of 
$78  is  a low  assessment?  I confidently  claim  that  $78  per 
capita  is  a fair  figure  for  you  to  take  as  applying  to  the 
population  of  Wisconsin,  and  that  in  the  final  just  consid- 
eration of  the  true  “general  property”  subject  to  taxation, 


110 


and  which  can  and  should  shoulder  its  part  of  the  tax  bur- 
dens along  with  railroad  property,  you  will  put  down  at 
least  $175,000,000  of  moneys  and  credits,  which  would  be 
seventy-eight  dollars  per  capita  of  the  present  population  of 
the  state. 

Here  is  your  view,  expressed  in  the  1903  report,  after  this 
careful  and  painstaking  inquiry  into  the  assessment  of 
moneys  and  credits  in  1902 : 

“The  amount  assessed  in  1902  is  believed  to  be  but  a 
small  portion,  or  at  least  not  a very  large  portion,  of  the 
total  amount  of  credits  legally  subject  to  taxation.”  This 
view  you  reiterated  later  on  in  the  same  report,  in  these 
words  : “It  is  reasonably  certain,  however,  that  the  total 

amount  of  credits  legally  liable  to  assessment  under  present 
day  business  conditions,  after  deducting  bona  fide  debts 
owing  by  the  holders  thereof,  is  a very  large  sum  and  it  is 
not  doubted  that  it  exceeds  many  times  the  seemingly  large 
sum  assessed  in  1902.” 

Holding  these  views  as  you  do,  based  upon  actual  returns 
of  cash  for  assessment,  I feel  the  more  confidence  is  asking 
you  to  estimate  an  amount  of  moneys  and  credits  legally 
liable  to  assessment,  equal  to  that  being  actually  returned  to 
assessors  for  assessment  in  scores  and  scores  of  the  smaller 
assessment  districts  of  the  state. 

The  situation  as  you  find  it,  is  an  intentional  under-valua- 
tion of  the  amount  of  moneys  and  credits  subject  to  taxa- 
tion by  practically  all  the  assessors  in  the  City  of  Milwaukee, 
and  the  larger  cities.  These  particular  assessors  habitually 
and  intentionally  violate  the  law  by  returning  the  moneys 
and  credits  in  their  districts  at  a much  less  amount  than 
they  know  to  exist.  It  is  equivalent  to  fraud  on  their  part — 
a fraud  upon  the  tax  payers  in  those  assessment  districts 
where  they  do  return  an  average  of  $78  per  capita,  and  it 
will  be  a fraud  upon  the  railroad  companies  if  some  ap- 


Ill 


proximation  to  the  truth,  as  to  moneys  and  credits,  is  not 
embodied  in  your  estimate  of  the  general  property  legally 
liable  to  taxation,  as  a basis  for  determining  the  just  “av- 
erage rate”  which  you  are  seeking. 


A Fair  Valuation  of  Personal  Property. 

I said  that  I hoped  to  demonstrate  in  a reasonable  way 
that  the  assessment  of  1903  upon  personal  property  does  not 
exceed  thirty  per  cent,  of  its  value  and  should,  therefore, 
be  made  seven  hundred  and  ninety  millions.  The  fact  dis- 
closed by  the  assessment  of  the  tangible  personal  property 
of  decedents’  estates,  ignoring  all  intangible  property,  at 
thirty  per  cent,  of  the  appraisement,  is  proof  of  a universal 
practice  among  assessors  in  Wisconsin  to  assess  all  person- 
ality at  not  to  exceed  thrity  per  cent,  of  value.  That  is  not 
mere  “speculation.”  It  is  proof. 

The  fact  that  merchandise  stocks  are  habitually  and  uni- 
versally assessed  at  thirty  per  cent,  of  their  value  confirms 
the  existence  of  this  general  and  uniform  practice  in  thus 
assessing  all  personal  property.  It  is  far  more  reasonable 
to  expect  a true  assessment  of  merchants’  stocks  than  of 
the  property  of  such  corporations  as  water  and  lighting 
companies,  or  a true  assessment  of  logs,  and  ties,  wagons, 
watches,  or  of  live  stock,  or  of  that  indefinite  item  called 
“all  other  personal  property.”  The  assessor  has  the  same 
sources  of  information  that  we  have  regarding  stocks  of 
goods  in  the  hands  of  merchants.  He  can  go  to  the  mercan- 
tile agencies,  if  he  wants  to,  and  get  information.  He  can 
make  investigations. 

Mr.  Curtis:  Do  you  suppose  any  assessor,  if  he  had  the 

money  to  put  up,  could  obtain  from  the  commercial  agencies 


112 


this  information  as  to  stocks  of  goods  of  merchants  and  other 
business  men  ? 

Mr.  Crandon : They  do  in  Chicago.  They  go  right  to 

the  commercial  agencies  there.  One  of  the  things  said  to 
us  when  we  were  talking  to  the  commercial  agency  men  was : 
‘‘Why,  certainly;  the  board  of  review,  or  board  of  assessors, 
send  over  constantly  to  check  up  these  questions  of  local  as- 
sessment on  stocks  of  goods  and  merchandise.” 

Chairman  Gilson : As  to  particular  individuals  ? 

Mr.  Crandon : Yes ; and  gave  us  the  names  of  some. 

Mr.  Curtis:  I had  to  fight  like  everything  to  get  them 

to  consent  to  their  depositions  being  taken,  for  the  purpose 
of  private  litigation;  which  is  a long  way  removed  from 
assessment  and  taxation  purposes. 

Mr.  Crandon:  One  of  the  men  they  spoke  of  was  Fred 

TJpham,  Chairman  of  the  Board  of  Tax  Review  in  Chicago. 

Mr.  Baldwin : There  is  abundance  of  evidence,  sound 

evidence,  available  to  you  to  justify  the  conclusion  that  there 
is  a deliberate,  systematic  and  unlawful  practice  by  Wis- 
consin assessors  of  assessing  the  personal  property  of  the 
state  at  not  over  thirty  per  cent,  of  actual  value.  That  is 
not  mere  “belief” — it  is  fact.  It  is  far  less  than  the  truth, 
as  embodied  in  the  view  of  all  the  writers  and  students  of 
economics,  who  say  that  in  a commercial  and  manufactur- 
ing state  like  Wisconsin  the  value  of  the  personality  equals 
if  it  does  not  exceed  the  value  of  the  real  estate. 

But  the  critic  will  say,  “Point  out  this  personal  property ; 
tell  us  where  you  find  it.”  In  reply  to  that,  I respectfully 
submit  the  following: 


113 

A Valuation  of  Wisconsin  Personalty. 
(1903.) 


Merchandise  Stocks $200,000,000 

Live  Stock 171,000,000 

Moneys  and  Credits  . 175,000,000 

Bank  Stocks 22,000,000 

Logs,  Timber,  Lumber,  etc 40,024,000 

Steam  and  other  Vessels.  . . . 1,870,000 

Water  and  Light  Companies 31,698,000 

Wagons,  Carriages,  ete 20,006,000 

Watches  438,000 

Pianos . . . . 9,528,000 

All  other  Personal  Property 80,048,000 


$751,612,000 

Briefly  stated,  this  table  gives  values  to  stocks  of  merchan- 
dise, live  stock,  moneys  and  credits,  and  bank  stocks,  based 
upon  specific  evidence,  and  as  to  all  the  other  items  determ- 
ines value  from  the  fact  that  the  personalty  assessment 
is  uniformly  not  to  exceed  thirty  per  cent,  of  value : 
This  percentage  is  applied  to  the  1903  assessment,  as  reported 
for  the  various  items. 

Chairman  Gilson:  As  to  bank  deposits  the  amount  re- 

ported is  one  hundred  and  fifty  to  sixty  millions.  There 
is  in  actual  moneys  in  those  banks,  however,  probably  not 
to  exceed  $20,000,000.  The  balance  of  it  is  credits;  the 
amount  they  owe  their  depositors.  And  those  depositors 
are  entitled  to  off-sets  under  the  existing  law  in  arriving 
at  the  amount  they  are  to  be  taxed  as  credits. 


114 


Average  Tax  Rate  Upon  Value  of  Property  in  Ad  join- 
ing States. 

You  are  to  establish  and  declare  for  Wisconsin  such  a 
tax  rate,  to  be  levied  upon  railroad  property,  as  will  make 
that  class  of  property  pay  the  rate  that  would  be  paid  upon 
the  average  by  all  the  general  property  of  the  state,  if  all 
general  property  was  assessed  at  its  full  and  true  value. 

In  the  states  adjoining  Wisconsin  this  average  rate  of  tax- 
ation does  not  exceed  seven  mills  and  a half  on  the  dollar. 
In  the  State  of  Iowa  it  is  about  seven  and  one-half  mills, 
while  in  Illinois,  Missouri  and  Nebraska  it  is  less. 

It  does  not  follow  that  because  the  citizens  of  adjoining 
states  pay  a tax  rate  of  seven  mills  upon  the  full  value  of 
their  property  that  the  property  owners  in  Wisconsin  are  not 
in  fact  paying  a higher  rate.  But  you  are  not  dealing  with 
exact  conditions.  The  whole  question  depends  upon  how  you 
estimate  land  values  and  how  you  estimate  personalty  values. 
It  is  a process  of  estimation.  So  it  has  been  in  a measure,  in 
these  adjacent  states.  My  information  as  to  facts  there  is 
gathered  partly  from  my  own  personal  knowledge  and  partly 
from  information  given  me  by  the  officials  of  Iowa  and  Illi- 
nois and  other  states. 

The  law  of  Iowra  requires  all  property  to  be  valued  at  full 
value,  and  then  provides  that  it  shall  be  assessed  for  taxation 
at  twenty-five  per  cent,  of  such  full  value.  In  Illinois  the 
proportion  named  for  assessment  is  twenty  per  cent,  of  full 
value,  by  statute.  There  is  no  such  statute  in  Missouri,  or 
Nebraska.  As  to  railroads,  in  all  the  states  named,  it  is 
simply  a question  of  their  valuation.  The  assessing  boards 
determine  upon  evidence  what  is  the  proportion  of  assess- 


115 


merit  to  full  value  adopted  or  prevailing  in  the  practice  of 
the  assessors  of  the  general  property  and  this  proportion  or 
ratio  they  apply  to  railroad  valuations,  which  then  pay  the 
same  rate  of  taxation  that  is  levied  upon  other  property  in 
the  various  taxing  districts  in  which  the  railroad  property  is 
situated.  The  average  rate  upon  full  value  in  Iowa  is  seven 
and  one-half  mills. 

Mr.  Haugen : The  tax  paid  by  the  railroad  would  vary 

with  the  different  companies,  depending  on  the  taxing  dis- 
tricts in  which  they  run. 

Mr.  Baldwin:  Yes;  the  rate  of  seven  and  one-half  mills 

is  the  average  rate  paid  by  the  owners  of  the  general  prop- 
erty in  Iowa.  Take  the  sum  of  all  the  taxes  paid  in  Iowa 
and  the  sum  of  all  the  assessment,  and  it  comes  to  about 
thirty-nine  mills.  The  State  Board  of  Equalization,  in  fix- 
ing the  value  of  railroads,  after  a most  thorough  examina- 
tion two  years  ago,  found  that  farm  lands  were  in  fact  as- 
sessed at  about  seventeen  per  cent,  of  their  true  full  value; 
and  they  applied  this  ratio  or  proportion  to  their  valuation 
of  the  railroads.  This  is  simply  another  illustration  of  what 
human  assessors  do  in  the  matter  of  taxation.  The  Iowa  law 
says  that  all  property  shall  be  returned  at  its  full  value,  and 
pay  taxes  upon  twenty-five  per  cent,  of  such  full  value,  but 
nevertheless  the  Iowa  farmers  assessed  their  farms  at  seven- 
teen per  cent,  of  value.  At  the  1903  meeting,  after  full  in- 
vestigation, it  was  decided  that  the  ratio  is  now  twenty  per 
cent.  Therefore,  the  property  of  Iowa  is  paying  upon  its  full 
value  an  average  tax  rate  of  seven  and  a half  mills  on  the 
dollar. 

In  the  case  of  Illinois,  I will  read  from  a letter  to  myself 
from  the  State  Auditor,  stating:  “Relative  to  the  matter  of 

valuations  of  taxable  property  in  this  state,  as  determined 


116 


upon  by  the  various  assessors,  the  property  is  not  valued  at 
its  full  fair  cash  value.  The  State  Board  of  Equalization  at 
its  last  session  passed  the  following  resolution:  c Whereas,  it 

has  been  the  opinion  of  the  individual  members  of  this  Board 
ever  since  the  receipt  of  the  returns  of  the  several  county 
clerks,  that  the  real  and  personal  property  of  the  state  has 
been  valued,  for  the  purpose  of  assessment,  for  the  year  1903 
at  not  to.  exceed  70  per  cent,  of  its  fair  cash  value ; therefore, 
in  order  to  give  expression  of  such  opinion  as  a Board, 

“Be  it  Resolved,  That  in  the  opinion  of  this  Board,  and 
the  Board  so  finds  after  a careful  investigation  and  full 
consideration,  that  the  real  and  personal  property  of  the  state 
has  been  valued  for  the  purpose  of  assessment  for  the  year 
1903  at  not  to  exceed  70  per  cent,  of  its  fair  cash  value.”  ’ ” 

To  find  the  average  rate,  take  20  per  cent,  of  that  or  11 
per  cent,  of  the  rate  for  the  whole  state.  In  Illinois,  out- 
side of  the  City  of  Chicago,  the  average  full  rate  is  45  mills. 
I have  another  letter  from  him  stating  that.  So  that,  if  you 
apply  that  in  the  same  way  you  have  an  average  tax  rate 
upon  full  value  of  6 3-10  mills  for  the  State  of  Illinois,  out- 
side of  Chicago. 

Missouri  has  the  lowest  tax  rate  of  any  western  state.  The 
total  tax  rate  upon  property  in  Missouri  is  less  than  21  mills ; 
and  it  was  a surprise  to  find  that  in  the  City  and  County  of 
St.  Louis  it  is  just  a trifle  more  than  it  is  in  the  rest  of  the 
state. 

I have  here  equally  satisfactory  information  from  the  offi- 
cials of  that  state  that  the  assessment  of  farm  property  is 
made  upon  a basis  of  33  per  cent.  Hence,  the  rate  that  is 
being  paid  in  Missouri  is  seven  mills  upon  full  value.  In 
Nebraska  it  is  not  over  six  mills. 

What  reason  is  there  for  believing  that  the  general  prop- 


117 


erty,  the  land  and  the  personal  property,  in  a state  like  Wis- 
consin is  paying,  in  proportion  to  its  actual  value,  a much 
higher  tax  rate  than  prevails  in  Iowa,  or  in  Illinois,  or  in 
Missouri,  or  in  Nebraska?  It  has  no  larger  proportion  of 
cities  or  towns,  with  high  tax  rates,  in  proportion  to  popula- 
tion. Its  expenditures  for  state  purposes,  or  for  the  cost  of 
schools,  or  for  county  or  village  government,  is  no  greater  in 
proportion  to  population  than  is  theirs.  Its  actual  per  capita 
wealth  is  fully  equal  to  theirs.  How,  then,  can  it  follow  that 
the  average  tax  rate  upon  property  in  Iowa  and  Illinois  and 
Missouri  and  in  Nebraska  does  not  exceed  seven  and  a half 
mills  in  any  state,  while  in  Wisconsin  it  is  greater?  The 
answer  must  he  found  in  the  estimate  of  the  proportion  of  the 
local  assessment  to  actual  value. 

The  Commission  now  has  substantial  and  satisfactory  evi- 
dence that  the  value  of  the  entire  real  estate  of  Wisconsin  is 
not  less  than  seventeen  hundred  and  fifty  millions,  and  that 
the  value  of  the  personalty  equals  seven  hundred  and  fifty 
millions,  or  forty-three  per  cent,  of  the  real  estate.  This 
would  indicate  a value  for  the  general  property  of  Wisconsin 
of  twenty-five  hundred  millions,  and  an  average  tax  rate  of 
about  eight  mills. 

Judge  Taft's  Decision  in  the  Louisville  & Nashville 

Case. 

Mr.  Crandon  called  the  attention  of  the  Commission  to  the 
case  of  Taylor  vs.  Louisville  & Nashville  Railroad  Company , 
decided  by  the  United  States  Court  of  Appeals,  the  opinion 
being  written  by  Judge  Taft,  now  a member  of  President 
Roosevelt’s  Cabinet.  Because  of  its  importance  and  perti- 
nence to  the  matters  now  before  you,  it  is  hoped  that  the 


118 


members  of  the  Commission  will  consider  it.  It  is  reported 
in  88  Federal  Reporter,  page  350. 

This  decision,  and  the  many  others  which  are  cited  and 
approved  in  the  opinion,  seem  to  clearly  justify  these  con- 
clusions : 

First.  A constitutional  provision  enjoining  equality  and 
uniformity  in  taxation  is  paramount,  and  overrides  acts  of 
the  legislature. 

Second.  Courts  will  direct  a proper  and  equal  assessment, 
on  complaint  of  any  class  of  taxpayers  owning  a species  of 
property  about  to  be  taxed  at  higher  rates  than  the  owners 
of  another  species  of  property. 

Third.  Courts  treat  the  assessment  of  the  general  prop- 
erty of  the  state  as  an  entirety,  and  compare  it  in  proportion 
to  full  value  with  the  railroad  assessment  as  an  entirety,  and 
regard  as  “absolutely  futile”  the  suggestion  that  railroad 
companies  go  before  local  taxing  boards  and  attempt  to  se- 
cure changes  in  the  prevailing  methods  of  assessment,  whether 
as  to  omissions  or  undervaluations  of  property. 

Fourth.  All  that  it  is  necessary  to  show  is  that  there  exists 
among  the  local  assessors  of  the  state  an  intentional  and  sys- 
tematic disregard  of  the  law,  the  effect  of  which  would  be,  if 
it  was  ignored,  to  cause  railroad  property  to  be  taxed  at  a 
higher  average  rate  than  the  owners  of  all  the  other  property 
are  taxed,  whether  this  intentional  disregard  is  through  sys- 
tematic failure  to  assess  or  systematic  undervaluation  of  that 
which  is  assessed. 

Fifth.  Inequalities  due  to  mere  mistake,  or  to  the  falli- 
bility of  human  judgment  must  be  borne.  Sporadic  cases 
of  discrimination  cannot  be  remedied.  But  when  there  ex- 
ists systematic  and  intentional  practices  in  the  assessment  of 


119 


property,  the  result  of  which  will  unjustly  distribute  the 
burden  of  taxation,  such  practices  cannot  be  overlooked. 

This  Commission  is  the  supreme  authority  in  Wisconsin, 
with  power  to  take  into  just  consideration  every  fact  and 
every  form  of  discrimination,  which  tends  to  nullify  the 
requirement  of  the  constitution  that  taxation  shall  be  uni- 
form. 

The  Iowa  Tax  Rate  is  Seven  and  a Half  Mills. 

The  following  is  one  of  the  letters  referred  to  in  my  re- 
marks : 

“State  of  Iowa,  Department  of  State. 

Des  Moines,  Iowa,  January  2,  1904. 

W.  W.  Baldwin,  Esq., 

Ass’t  to  President,  C.  B.  & Q., 

Burlington,  Iowa. 

Dear  Sir : 

In  response  to  your  inquiry  as  to  what  is  the  average  tax 
rate  upon  full  value  of  property  in  the  State  of  Iowa,  will 
say  that  I can  only  refer  you  to  the  official  figures  as  returned 
to  the  State  Auditor  and  taken  from  his  last  public  report. 

He  issues  a statement  showing  that  the  total  taxable  value 
of  all  property  assessed  by  local  assessors,  for  the  year  1901, 
was  $558,654,871.  The  taxes  upon  this  property  were  paid 
in  the  subsequent  year  and  amounted  in  the  aggregate  to 
$22,542,580.45,  which  included  $400,000  (estimated)  re- 
turned as  special  taxes ; that  is,  levies  in  cities  for  sidewalks, 
pavements,  sewers,  etc.,  which,  being  deducted,  leaves  the 
general  property  tax,  including  that  paid  by  the  railroads, 
$22,142,580.45.  The  railroads  paid  for  that  year  $1,563,- 
492,  so  that  apparently  the  amount  of  taxes  levied  upon  the 
assessed  general  property,  real  and  personal,  in  the  State  of 
Iowa  amounted  to  $20,579,088.45. 

This  includes  poll  taxes,  which  were  considerable,  and 
does  not  take  any  account  of  uncollected  taxes,  but  if  that 
figure'  is  taken  as  the  correct  amount  levied  upon  the  total 


120 


assessed  property,  as  before  indicated,  it  would  show  an  aver- 
age tax  rate  upon  the  assessed  property  of  a little  less  than 
39  mills.  The  law  of  Iowa  requires  property  to  he  assessed 
at  25  per  cent,  of  its  full  value,  but  the  State  Board  of  Re- 
view estimated,  after  a careful  investigation  made  two  years 
ago,  that  the  assessment  of  farm  lands  did  not  exceed  17  3-10 
of  full  value. 

Owing  to  a general  increase  of  values  there  was  a marked 
increase  in  the  valuation  of  property  by  the  local  assessors 
and  the  State  Board  of  Review  in  July,  1903,  estimated  that 
the  valuation,  when  completed,  was  near  twenty  per  cent,  of 
the  actual  value.  If  twenty  per  cent,  is  taken  as  a correct 
figure  it  would  indicate  that  the  rate  of  tax  to  full  value  in 
the  State  of  Iowa  is  a fraction  less  than  seven  and  a half 
mills. 

Respectfully, 

(Signed)  W.  B.  Martin, 

Secretary  of  State.” 


Statement  of  T.  A.  Polleys  on  Ti-ie  Value  of  the 
Real  Estate  in  Wisconsin  Subject  to 
Taxation. 

Mr.  Polleys:  Mr.  Chairman  and  Gentlemen  of  the  Com- 
mission: I wish  to  be  heard,  as  briefly  as  I may,  upon  the 

single  question  of  the  realty  value  of  the  State  of  Wis- 
consin, and  I wish  to  preface  my  remarks  by  the  statement 
and  request  that,  in  all  that  I may  say,  I desire  to  be  under- 
stood as  in  entire  accord  with  all  that  has  been  said  here  by 
the  gentlemen  who  have  preceded  me,  upon  the  following 
propositions:  First,  in  the  land  sale  statistics,  as  I 

shall  call  them,  upon  which  the  calculations  of  the  Board  in 
prior  years  and  upon  which  my  calculations  this  year,  have 
been  based,  there  is  a large  element  of  error.  There  are 
many  improper  transactions  carried  into  those  statistics 
which  have  not  been  eliminated,  and  I think  cannot  be  elimi- 


121 


nated  by  any  process  of  examination  which  can  be  carried 
on  by  the  Board  operating  here  at  Madison.  Secondly, 
the  general  trend  of  the  improper  matter  which  is  present 
in  that  body  of  statistics  is  to  produce,  when  made  the  basis 
of  the  calculations  in  the  manner  pointed  out  by  the  Board, 
too  low  an  aggregate  valuation  for  the  realty  under  con- 
sideration. Thirdly,  I wish  to  state  that  I agree  entirely,  so 
far  as  I have  the  means  to  form  a judgment,  in  the  conclu- 
sion of  Mr.  Dudley,  that  the  realty  of  the  State  of  Wis- 
consin is  probably,  and  I think  undoubtedly,  worth  not  less 
than  the  sum  stated  by  him  this  morning,  between  $1,700,- 
000,000  and  1,800,000,000;  and  I should  say  it  might  very 
reasonably  and  properly  be  argued  to  be  worth  beyond 
$2,000,000,000. 

In  what  I have  to  say  I shall  confine  myself  quite  closely 
to  the  typewritten  notes  I made  day  before  yesterday. 
I wish  to  say  in  direct  connection  with  what  I have  just 
remarked,  that,  speaking  for  myself  only,  I am  con- 
vinced that  the  general  plan  adopted  by  the  Board  for  ascer- 
taining the  true  value  of  the  realty  of  the  state  is  theoretically 
the  best  yet  devised.  Now  stripped  of  all  unnecessary  de- 
tails the  theory  of  that  plan — and-  I am  speaking  of  the 
theory  and  not  the  practice — is  merely  this:  The  full  cash 

prices  for  which  lands  within  a given  district  are  act- 
ually sold  under  normal  conditions,  in  the  open  market, 
furnish  the  best  basis  for  determining  the  actual  true 
cash  or  market  value  of  all  lands  within  that  district, 
whether  it  be  an  assessment  district,  a county  or  a 
state.  The  result  arrived  at  by  following  the  Board’s  plan 
will  more  and  more  nearly  approximate  the  truth  in  just 
the  measure  that  the  statistics  of  land  sales,  upon  which  the 
arithmetical  calculations  are  all  based,  contain  only  sales 


122 


made  at  full  cash  prices  and  under  normal  conditions.  No 
one  contends  that  the  statistics  of  land  sales  thus  far  trans- 
mitted, from  year  to  year,  to  the  secretary  of  state  by  the 
various  registers  of  deeds,  contain  all  that  they  should  con- 
tain, and  nothing  that  they  should  not  contain.  I 
take  it  that  the  Board  itself  frankly  admits  this, 
by  the  effort  it  has  made  to  have  the  law  relative  to 
such  statistics  properly  amended,  and,  as  amended,  properly 
carried  out  by  the  various  registers  of  deeds.  The  general 
tendency  of  the  transactions,  which  are  improperly  included, 
as  I remarked  a moment  ago,  by  the  registers  of  deeds  in 
their  annual  reports  of  land  sales,  is  towards  the  production 
of  too  low  an  aggregate  valuation  of  the  realty;  and  I will 
merely  enumerate  a number  of  the  different  sorts  of  trans- 
actions of  that  character  which  have  occurred  to  me. 

First,  the  tax  sales.  They  are  directed  to  drop  these  out, 
but  they  do  not  drop  them  out.  Secondly,  foreclosure  and 
execution  sales.  Third,  sales  subject  to  mortgage.  Now, 
all  these  are  covered  by  the  statute,  as  amended,  but  it  is 
perfectly  obvious  that  the  statute  as  amended  is  not  being 
carried  out  and  perhaps  will  not  be  carried  out  without 
careful  supervision. 

Mr.  Curtis:  The  statute,  as  amended,  includes  tax  sales. 

Mr.  Polleys : Yes. 

Mr.  Curtis : I thought  vou  stated  that  the  statute  as 

amended  did  not,  in  form,  exclude  them. 

Mr.  Polleys:  I say,  it  does  in  form  exclude  all  these 

things  I have  mentioned.  Fourth,  sales  of  undivided  in- 
terests. Fifth,  sales  by  quitclaim,  or  special  warranty  deed. 
Sixth,  deeds  pursuant  to  land  contracts.  There  is  many 
a deed  that  is  going  on  record  of  course  in  different  parts 


123 


of  the  state  where  the  deed  is  executed  pursuant  to  land  con- 
tract made  long  ago  when  the  land  was  unimproved.  The 
deed  is  made  after  the  man  has  gone  upon  the  land  and  im- 
proved it,  and  the  land  is  worth  twice  or  three  times  as  much 
as  at  the  time  the  land  contract  was  made,  and  yet  the  con- 
sideration written  in  the  deed  is  the  land  contract  consid- 
eration. Seventh,  the  improper  transactions  to  which  Mr. 
Dudley  alluded  this  morning,  and  that  is  the  class  in  which 
the  consideration  is  intentionally  understated  by  the  parties 
to  the  transaction.  I believe — and  I wish  to  say  it  frankly — 
that  that  is  one  of  the  great  dangers  to  which  the  theory  of 
the  Board  as  to  arriving  at  realty  values  will  be  subjected  in 
the  time  immediately  ahead  of  us. 

Now,  on  the  other  hand,  there  are  certain  transactions 
which  undoubtedly  get  into  this  body  of  statistics  which  tend 
in  an  opposite  direction;  but  I do  not  think  for  a moment 
that  in  relative  number  or  in  relative  importance  they  com- 
pare with  the  group  to  which  I have  just  called  attention. 
In  this  second  class  are,  first,  exchanges  of  real  estate  in 
which  no  cash,  or  only  a relatively  small  amount  of  cash, 
passes  and  the  consideration  on  both  sides  is  overstated  by 
the  parties  to  it;  that  is,  where  each  fellow  is  in  a trading 
mood,  and  calls  his  property  worth  a good  deal  more  than  it 
actually  is  worth. 

Mr.  Curtis : Speculative  figures. 

Mr.  Polleys:  Speculative  figures;  and  I do  not  doubt 

there  are  transactions  of  that  kind ; in  fact,  I remember  of 
Mr.  Haugen  calling  my  attention  to  one  or  two  transactions 
of  that  kind  in  St.  Croix  County.  Then  there  is  the  group 
of  cases  where,  usually  by  the  wish  of  the  grantee,  the  con- 
sideration is  overstated. 

Outside  of  those  two  groups  I can  think  of  nothing  at 


124 


present  which,  goes  to  offset  the  large  number  which  I cited 
in  the  other  class. 

Mr.  Curtis : Isn’t  there  quite  a large  class  of  cases  where 

something  other  than  land  has  actually  passed  between  the 
parties,  and  the  consideration  for  the  whole  transaction  is 
stated  as  the  consideration  for  the  conveyance  ? As,  for  in- 
stance, the  transfer  of  a farm,  including  the  personal  prop- 
erty upon  it? 

Mr.  Polleys:  Yes,  I heard  of  an  instance  of  that  kind 
in  St.  Croix  County,  while  I was  carrying  on  the  work 
there,  of  a valuable  farm  that  was  transferred,  and  the  last 
time  the  personalty  upon  the  farm  was  included. 

Chairman  Gilson:  The  statement  has  been  made  byf 

gentlemen  representing  counties  before  this  Board  seeking  a 
lower  assessment,  that  a large  number  of  conveyances  in 
their  counties  included  personal  property  or  other  property 
spoken  of  by  Mr.  Curtis;  and  for  that  reason  they  urged 
that  it  produced  too  high  a valuation  of  the  property  in  their 
county. 

Mr.  Polleys:  I think  that  those  gentlemen  see  double  on 

those  things.  I do  not  imagine  that,  there  are  any  large 
number,  but  I wish  to  be  understood  as  conceding  that  things 
of  that  kind  do  occur  occasionally ; but,  as  compared  with  the 
large  mass  of  transactions  that  get  into  these  statistics,  and 
properly  get  into  them,  it  is  a comparatively  small  matter, 
I think.  Now,  I believe  that  the  Board  will  agree 
that  the  group  of  improper  transactions  which  tends 
to  produce  too  low  an  aggregate,  on  the  whole  out- 
weighs the  other  group ; and  this  is  shown  by  the  fact  that  in 
the  process  of  elimination,  which  you  have  gone  through 
here,  as  I know,  in  computing  the  different  districts,  on 


125 


the  whole  you  have  found  that  the  process  results  in  some- 
what larger  aggregates  than  you  get  without  elimination. 
On  that  question  of  elimination  I wish  simply  to  repeat 
what  I said  before:  that  I do  not  think  it  can  be  thoroughly 
or  properly  carried  on  here  at  Madison,  merely  from  an  in- 
spection of  the  reports  of  the  registers  filed  at  Madison. 
This  was  more  fully  shown  by  Mr.  Dudley  - this  morning, 
and  the  reason  stated  why  that  must  be  so.  Such  a process 
of  elimination  must  still  leave  in  the  body  of  statistics 
many  transactions  which  do  not  properly  belong  there.  Im- 
provement of  the  statistics  will  result  from  a careful  super- 
vision and  checking  up  of  the  registers,  and  a very  heart- 
less disallowance  of  fees,  where  they  do  not  make  up  such 
reports  as  they  ought  to  from  the  deeds  they  have  before 
them.  So  it  seems  to  me  that  the  aggregate  value  of  realty 
within  the  state,  which  is  reached  by  using  the  statistics  as 
filed  at  Madison,  whether  computations  are  made  for  a long 
period  or  a short  period,  are  uniformly  lower  than  they 
would  be  but  for  the  presence  of  improper  transactions  in 
the  statistics. 

So  much  by  way  of  introduction. 

How,  this  is  the  main  proposition  to  which  I wish  to  ad- 
dress myself : To  determine  approximately  the  present  true 

cash  value  of  all  the  realty  within  the  State  of  Wisconsin, 
it  is  unnecessary  (and  being  unnecessary  is  therefore  un- 
just) for  the  Board  to  take  into  account  land  sales  for  a 
longer  period  than  the  twelve  months  expiring  September 
1,  1903. 

The  determination  by  the  Board  of  the  value  in  1903  of 
the  general  property  of  the  state  is  one  matter,  and 
the  determination  of  the  value  of  the  respective  railroad 
properties  within  the  state,  as  of  the  same  time,  is  an  entirely 


126 


distinct  matter,  and  the  two  should  not  be  unnecessarily 
coupled  together  by  the  Board.  There  may  be,  and  I have 
no  doubt  there  are,  many  reasons  why  the  value  of  railroad 
properties  can  only  be  fairly  estimated  by  taking  a period 
extending  over  quite  a number  of  years,  which  reasons  do 
not  at  all  control  in  the  determination  of  the  aggregate  value 
of  a large  body  of  lands  as  of  a given  time. 

The  aggregate  value  of  realty  in  the  State  of  Wisconsin 
as  fixed  by  the  Board  in  October  last,  for  equaliza- 
tion purposes,  at  $1,309,504,464,  was  arrived  at,  as  I un- 
derstand, by  calculations  made  in  accordance  with  the  plan 
or  formula  of  the  Board,  and  based  upon  the  land  sales  with- 
in the  various  assessment  districts,  for  a five  years’  period 
ending  September  1,  1902. 

Before  proceeding  farther  I will  give  the  result  obtained 
by  me,  as  compared  with  the  results  of  the  Board,  in  calcu- 
lating, in  accordance  with  the  methods  described  by  the 
Board,  the  realty  values  of  Dane  and  Dodge  counties  for 
both  the  seven  years’  and  the  five  years’  period,  and  of 
Clark  and  St.  Croix  counties  for  the  five  years’  period. 

Mr.  Haugen  : Your  periods  end  when  ? 

Mr.  Polleys : The  seven  years’  period,  on  September  1, 

1901,  and  the  five  years’  period  on  September  1,  1902: 
the  ratios  worked  out  being  related  in  each  instance  to  the 
assessment  of  the  preceding  year,  prior  to  the  time  the 
land  sales  reports  were  made  out — well,  that  is  not  en- 
tirely true,  because  you  will  remember  the  Board  itself,  in 
having  its  computations  made,  made  a change  at  the  year 
1899.  For  instance,  the  assessment  rolls  of  the  year  1899 
were  used  by  the  Board  itself  in  the  computations  which 
have  been  made  for  it  based  on  the  land  sales  for  the  year 
ending  September  1,  1899 ; and  also  as  the  basis  of  the  com- 


127 


putations  for  the  year  ending  September  1,  1900.  I have 
used  them  in  the  same  manner  that  the  Board  used  them,  as 
I was  informed. 

Mr.  Haugen : I wanted  to  know  whether  you  brought  it 

up  to  the  1st  day  of  September,  1903  ? 

Mr.  Polleys:  I do  bring  the  values  of  the  state  down  to 

that  time ; but  the  last  year  is  no  part  of  the  five  years’  or 
seven  years’  period. 

How,  I will  ask  close  attention  to  these  figures,  although 
they  are  figures,  and  to  the  close-  comparison  and  corre- 
spondence which  will  appear  throughout,  between  the  results 
which  I have  reached  and  the  results  which  the  Board  has 
reached. 

On  the  seven  years’  period  the  Board  found  Dane  County 
realty  to  be  worth  $57,266,795.  I found  it  to  be  $57,- 
917,106. 

Dodge  County,  seven  years’  period,  the  Board’s  result, 
$41,615,979;  our  result,  $41,734,473.  , 

How  take  the  five  years’  period: 

Dane  County,  for  the  Board,  $60,725,027 ; our  result, 
$60,411,723. 

Dodge  County,  for  the  board,  $43,337,744;  our  result, 
$42,243,500 ; the  largest  discrepancy  that  appears,  I think. 

St.  Croix  County,  the  Board’s  result,  $11,130,263 ; our 
result,  $11,196,019. 

Clark  County,  the  Board’s  result,  $11,786,730;  our  re- 
sult, $11,898,164. 

I lay  considerable  stress  upon  the  correspondence  of  the 
combined  results,  because  it  is  not  one  county  or  one  town- 
ship we  are  figuring  on ; it  is  the  state  at  large.  The  Board’s 


128 


combined  result  for  the  five  years’  period,  for  the  four 
counties,  is  $126,979,764;  our  result,  $125,749,406. 

That,  you  will  understand,  is  reached  by  my  going  through 
the  very  same  process  outlined  by  your  Board,  taking  up 
each  assessment  district  by  itself,  and  figuring  the  average 
five  years’  valuation,  in  the  precise  method,  as  I understand 
it,  outlined  and  prescribed  by  your  Board. 

Mr.  Curtis : Except,  in  making  your  elimination  of  items 
you  exercised  your  judgment  according  to  the  general  plan 
as  you  understood  it  to  be  by  the  Board;  and  in  our  work 
it  was  the  exercise  of  the  individual  judgment  of  the  person 
supervising  the  work. 

Mr.  Polleys:  Let  me  say  right  there,  I find  I am  cor- 

roborated in  the  idea  that  such  elimination  as  has  been  made, 
or  can  be  made,  on  the  whole,  when  you  take  the  state  at 
large,  or  a county  at  large,  is  relatively  an  unimportant 
matter,  and  the  eliminations  that  were  made  by  me,  or  for 
me,  practically  amounted  to  nothing  whatever  in  three  coun- 
ties. I took  the  statistics  just  as  they  were  in  the  counties 
of  Dane,  St.  Croix  and  Dodge.  I don’t  think  there  were 
half  a dozen  transactions  eliminated  in  our  work.  Those 
you  can  check.  They  were  eliminated  by  Mr.  Sudheimer, 
who  was  working  with  me. 

Mr.  Baldwin : Doesn’t  that  establish,  with  a good  deal  of 
conclusiveness,  that  there  were  practically  no  eliminations 
made  by  the  men  who  made  the  other  computations  ? 

Mr.  Polleys  : Well,  yes  and  no.  The  eliminations  that 

were  made  by  the  other  gentlemen  bore  both  ways. 

Mr.  Haugen:  You  made  fewer  eliminations  than  the 

Board  ? 

Mr.  Polleys : Yes. 


129 


Mr.  Haugen:  The  Board  made  more  eliminations  than 

you  did  ? 

Mr.  Polleys:  Yes.  In  Clark  County,  I wish  to  say  that 
the  land  sale  statistics  are  in  very  had  condition;  and  in 
order  to  get  any  sort  of  a figure  for  Clark  County  we  had  to 
eliminate  quite  a good  deal.  Just  how  much,  I cannot  say, 
but  the  elimination  for  Clark  County  amounted  to  more  than 
the  other  three  counties  combined. 

Mr.  Haugen : That  would  he  so  in  all  cases  where  land 

sales  have  been  as  numerous  for  the  last  few  years  as  they 
have  been  in  Clark  County. 

Mr.  Polleys : Yes,  I presume  that  would  be  the  tendency. 

Mr.  Haugen  : Large  tracts  have  been  sold. 

Mr.  Polleys:  The  fact  that  the  aggregate  of  our  com- 

puted realty  value  for  the  four  counties  named, 
so  very  closely  approximates  the  aggregate  of  the 
Board  for  the  same  counties,  tends  to  prove  the 
relative  unimportance  (when  the  problem  is  considered 
in  a large  way)  of  such  eliminations  as  can  properly  be  made 
from  a mere  inspection  of  the  statistics  as  filed  at  Madison. 

It  is  of  the  utmost  importance  to  constantly  bear  in  mind 
that,  so  far  as  concerns  the  taxation  of  railroads,  all  the 
Board  is  required  to  do  as  to  realty,  is  to  determine,  with  as 
close  approach  to  correctness  as  possible,  the  aggregate  value 
of  all  the  realty  within  the  State  of  Wisconsin  on  the  tax 
rolls  for  the  year  1903,  possibly  I might  say,  all  the  taxable 
real  estate  within  the  state  for  that  year.  For  the  pur- 
pose of  determining  this  general  question,  the  Board  is  not 
concerned  with,  and  is  under  no  necessity  to  consider,  what 
is  the  realty  value  for  1903  of  each  assessment  district  within 
the  state,  or  even  of  each  county,  separately,  within  the 
state. 


130 


I now  desire  to  call  the  attention  of  the  Board  to  some  of 
the  facts  which  tend  to  prove  that  the  realty  values  of  the 
four  counties,  Dane,  Dodge,  St.  Croix  and  Clark,  when  com- 
puted in  accordance  with  the  method  of  the  Board,  hut  on  the 
basis  of  land  sales  for  twelve  month  periods  only,  are  sub- 
stantially correct.  For  convenience,  I shall  call  this  the 
“yearly  realty  value”  of  the  respective  counties.  I will  use 
that  phrase  as  a short  expression. 

Now,  let  me  explain  right  there  what  I mean  by  that. 
Take  the  County  of  Dane.  I first  computed  the  realty  value 
of  each  assessment  district  in  the  county  separately,  on  the 
basis  of  the  land  sales  in  the  district  for  one  year,  using 
the  formula  of  the  Board.  Then  I added  together  the  forty- 
five  or  more  assessment  district  realty  values  thus  found, 
and  their  sum  is  what  I denominate  as  the  “yearly  realty 
value”  of  the  county  for  that  particular  year. 

Mr.  Curtis : In  other  words,  you  make  calculations  based 
upon  the  statistics  of  the  sales  of  one  year,  and  the  assess- 
ment of  one  year. 

Mr.  Polleys : Yes. 

Mr.  ITaugen:  Don’t  you  have  this  difficulty,  in  a great 

many  assessment  districts  you  will  find  no  data  to  go  upon? 

Mr.  Polleys:  Yes;  and  when  I found  that  was  so,  I just 
took  the  assessed  value  of  the  district  as  its  full  value,  and 
I took  the  worst  of  it  as  it  seems  to  me.  There  are  not  very 
many  cases  of  that  kind. 

Mr.  Haugen : When  there  were  only  one  or  two  sales  you 
would  be  about  as  bad  off  ? 

Mr.  Polleys:  Yes;  but  one  of  my  main  points  is  the  self- 
compensating  character  of  the  errors  that  arise  from  the  ap- 
plication of  your  plan.  We  are  not  dealing  with  a single 


131 


township.  We  are  not  dealing  with  a county.  We  are  deal- 
ing with  a large  district,  the  State  of  Wisconsin.  And  these 
aberrations  that  arise  from  the  application  of  your  theory  to 
facts  which  are  slightly  abnormal  in  a given  district,  simply 
rectify  themselves ; and  I believe  if  you  will  watch  the  figures 
closely  you  will  be  convinced.  I was  simply  explaining  how 
I arrived  at  the  gross  amount  of  a county,  in  a given  year. 
It  is  merely  by  computing  each  district,  as  you  prescribe  it 
shall  be  done,  and  then  adding  all  the  assessment  districts  in 
the  county  together.  That  is  the  way  I arrive  at  these  yearly 
values. 

And  now,  just  a few  observations  as  to  average  realty 
values  for  the  five  and  seven  year  periods  fixed  by  the  Board. 

First,  as  Mr.  Fhidley  noted  this  morning,  it  is  perfectly 
obvious  that  the  average  value  for  any  given  period  consist- 
ing of  a number  of  years  cannot  he  the  value  at  the  end  of  the 
period,  of  course,  unless  things  have  stood  absolutely  station- 
ary from  A to  Z during  that  period,  which  they  do  not  do, 
and  have  not  done.  FTow  if  values  increase  uniformly 
throughout  the  period,  then  the  average  value  for  the  period 
will  be  the  value  at  the  center  of  the  period.  These  are 
mere  arithmetical  propositions,  which  I trust  prove  them- 
selves. If  values  increase  more  rapidly  during  the  latter 
half  of  the  period — and  I think  we  shall  be  able  to  show 
you  they  have  done  so — then  your  average  value  is  some- 
what, but  not  much,  more  than  the  value  at  the  center  of  the 
period. 

How  during  the  six  years  ending  September  1,  1903,  the 
average  selling  price  of  lands,  per  acre,  in  each  of  the  four 
counties  named,  has  steadily  advanced,  as  is  shown  by  the 
following  table.  I will  take  up  Dane  County.  When  I men- 
tion a year,  it  will  be  understood  it  is  the  twelve  month  pe- 
riod, expiring  September  1st  of  the  year  mentioned: 


132 


1898. , 

. . .13,854 

acres 

sold  at  average  of  $41.34 

1899. , 

. . .26,292 

acres 

sold  at  average  of 

43.87 

1900.  . 

. . .30,894 

acres 

sold  at  average  of 

47.48 

1901. . 

, . .27,586 

acres 

sold  at  average  of 

50.03 

1902. , 

. . .28,701 

acres 

sold  at  average  of 

52.72 

1903. . 

O* 

GO 

acres 

sold  at  average  of 

53.58 

Mr.  Haugen : You 

. take  the  figures  reported  hy  the  reg- 

isters.  You  eliminate 

some 

of  those  ? 

Mr.  Polleys : Yes, 

that  is  true. 

Then,  in 

Dodge  County— 

-the  years  are  the  same — hut  in 

Dodge  County  the  progression  is  as  follows : 

1898 

$58.22 

1899 

57.75 

1900 

62.99 

1901 

68.49 

1902 

72.99 

1903 

Now  in  Dodge  County  the  number  of  acres  transferred, 
varies  from  13,000  to  22,000  per  year.  In  St.  Croix  County 
the  acres  transferred  varied  from  a little  less  than  30,000  to 
somewhat  more  than  45,000  per  year.  And  the  progression 
in  selling  price  was  as  follows : 


1898 

$12.16 

1899 

14.42 

1900 

14.71 

1901 

16.72 

1902 

21.88 

1903 

26.72 

Mr.  Haugen:  I have  $21.90,  just  2 cents  difference;  and 
the  last  figure  is  identically  the  same. 

Mr.  Polleys : Clark  County  you  will  find  different.  There 


133 


the  acreage  transferred  was  abnormal,  certainly,  in  some  of 
the  years.  I think  I will  read  the  acreage  transferred : 


1898  36,327 

1899  92,373 

1900  133,394 

1901  73,284 

1902  76,816 

1903  62,216 


Yon  have  to  eliminate  a large  number  of  transfers  in  order 
to  arrive  at  any  computation. 

Mr.  Curtis : You  reached  the  conclusion  that  the  Clark 

County  sales  included  some  tax  sales  as  well  ? 


Mr.  Polleys : I didn’t  have  time  to  look  into  that  point, 

as  you  undoubtedly  have.  I found  this  was  more  than  the 
four  days’  job  I told  you  I thought  it  would  be. 


Yow,  the  progression  of  average  selling  price,  in  Clark 
County,  is  very  striking.  Beginning  with  1898  the  selling 
price  per  acre  advanced  as  follows: 


1898 

1899 

1900 

1901 

1902 

1903 


$ 9.56 
8.77 
9.17 
13.59 
16.24 
18.19 


Mr.  Haugen:  You  are  a little  higher  than  I am  the  last 

two  years. 

Mr.  Polleys:  Yow  right  there,  let  us  just  call  attention  to 
the  jump  from  1902  to  1903.  In  Dane  County  it  advanced 
from  $52.72  to  $53.58;  in  Dodge  County  from  $72.99  to 
$81.90;  in  St.  Croix  County  from  $21.88  to  $26.72;  in 
Clark  County  from  $16.24  to  $18.19.  Yow,  your  five  years’ 


134 


period,  which  is  the  basis  of  your  October,  1903,  valuation 
of  realty,  takes  no  account  whatever,  of  course,  of  any  of  the 
advance  in  selling  price  which  has  gone  on  for  the  twelve 
months  expiring  September  1,  1903. 

Mr.  Baldwin:  Just  for  my  information,  will  you  give 

the  first  and  the  last  ? 

Mr.  Polleys:  Dane  County  advanced  from  $41.34  to 

$53.58;  Dodge  County  advanced  from  $58.22  to  $81.90; 
St.  Croix  County  advanced  from  $12.16  to  $26.72;  Clark 
County  advanced  from  $9.56  to  $18.19. 

In  Dodge,  St.  Croix  and  Clark  counties,  lands,  or  acre 
property,  comprises  the  great  bulk  of  the  realty  value  of  the 
counties.  In  Dane  County,  Madison  and  other  incorporated 
cities  and  villages  comprise  not  far  from  one-third  of  the 
realty  value  of  the  county. 

I am  now  coming  to  several  cross-checks  upon  my  yearly 
realty  values  for  these  counties. 

If,  as  we  contend  is  the  fact,  the  yearly  realty  value  of  the 
four  counties  named  is  substantially  correct,  then  we  ought 
to  expect  to  see  such  yearly  value  advancing  from  year  to 
year,  substantially  in  the  measure  that  the  average  price  per 
acre  for  which  lands  were  sold,  increased,  and  that  is  pre- 
cisely what  we  do  see  from  an  inspection  of  the  following 
table. 

How  I am  giving  you  my  yearly  values  as  computed  in 
the  manner  I have  stated,  for  the  different  counties ; and  you 
will  see  where  it  drops  back  slightly — but  in  the  same  places 
you  will  find  a slight  drop-back  in  the  selling  price  also. 

In  Dane  County  this  is  the  progression  of  yearly  realty 
values  of  the  county,  beginning  with  1895: 


135 


1895 

$51,536,743 

1896 

53,979,644 

1897 

53,065,969 

1898 

57,095,451 

1899 

55,316,097 

1900 

58,659,456 

1901 

67,664,496 

1902 

71,003,999 

1903 . . 

Mr.  Curtis : Those  were 

your  yearly  values  ? 

Mr.  Polleys:  Yes. 

Mr.  Curtis:  Your  statistical  matter  will  all  be  filed? 

Mr.  Polleys:  Yes;  but  I have  but  one  copy,  and  I would 

like  to  preserve  it. 

In  Dodge  County  the  progression  of  yearly  realty  values 
is  as  follows,  beginning  with  1895 : 

1895 

$40,311,197 

1896 

41,272,543 

1897 

39,142,112 

1898 

40,630,970 

1899 

42,241,308 

1900 

43,231,109 

1901 

46,055,087 

1902 

48,040,344 

1903 

. 52,782,201 

Now  the  same  thing  is 

shown,  if  you  take  up  St.  Croix 

and  Clark  counties.  You 

see,  as  you  would  expect  to  see, 

the  aggregate  value  of  the  lands  of  the  county  keeping 
pretty  close  step  with  the  progress  of  the  advance  in  market 

price  per  acre  of  the  land. 

But  that  is  not  all. 

If  the  yearly  realty  values  of  these  several  counties  are  ap- 


136 


proximately  correct,  as  computed  by  us,  we  ought  to  find  that 
the  yearly  values  for  what  may  he  termed  the  center  years 
of  the  seven  and  five  year  periods  (being  1898  and  1900, 
respectively)  are  somewhat,  but  not  greatly  less  than  the 
average  values  for  the  respective  periods,  inasmuch  as  the 
price  per  acre  for  lands  sold  increased  more  during  the  latter 
half  than  during  the  first  half  of  the  respective  periods. 
The  table  following  shows  how  well  the  yearly  values  of 
1898  and  1900  stand  this  test: 


Average  Yearly 

Value.  Value. 

Seven  years’  period — 

Dane  County $57,266,795  $57,095,451  (1898) 

Dodge  County 41,615,979  40,630,970  (1898) 

Five  years’  period — 

Dane  County 60,725,027  58,659,456  (1900) 

Dodge  County 43,337,744  43,231,109  (1900) 

St.  Croix  County 11,130,263  10,926,355  (1900) 

Clark  County 11,786,730  10,015,618  (1900) 


Yow,  this  is  a hard  matter  to  present  in  a very  enticing 
form,  but  I trust  I make  myself  plain  to  the  Board  as  I 
go  along.  If  I do  not,  I wish  you  would  interrupt  me.  I 
take  it  that  all  the  members  of  the  Board  are  entirely 
familiar  with  the  arithmetical  processes  which  have  been 
used  in  arriving  at  the  different  results,  and  therefore  un- 
derstand the  system  of  cross-checking  I have  attempted  to  in- 
troduce here. 

The  further  fact  that  the  yearly  realty  values  of  a given 
county  for  the  several  years  of  the  five  year  period,  added 
together,  and  the  sum  divided  by  five,  gives  an  average 
value  for  the  period  closely  approximating  the  average  value 
arrived  at  by  following  the  Board’s  method  of  computation, 


137 


is  additional  confirmation  of  the  position  that  the  yearly 
realty  values  thus  added  together  are  severally  substantially 
correct.  That  is  what  1 am  trying  to  prove,  that  the  last  one 
is  correct,  too.  Have  I made  myself  plain  on  that  proposi- 
tion ? When  you  tried  to  arrive  at  the  value  of  the  Town  of 
Albion  in  Dane  County  for  your  five  years’  period  you  did 
not  compute  what  it  was  worth  on  the  basis  of  each  twelve 
months’  period,  and  then  add  those  yearly  values  together 
and  divide  the  aggregate  by  five,  but  you  threw  into  one  con- 
tinuous computation  all  the  acres  transferred  during  the  en- 
tire five  years’  period  in  that  township  and  divided  the  gross 
consideration  into  the  gross  assessment  to  reach  your  ratio, 
and  then  applied  that  ratio  to  the  average  assessment  dur- 
ing the  five  years,  of  all  the  realty. 

Mr.  Curtis : Seeking  to  avoid  averaging  averages. 

Mr.  Polleys : Yes ; and  because  averaging  averages  in 

the  tests  I have  made  brings  you  back  to  substantially  the 
same  average  result  is  to  my  mind  further  proof  that  the  in- 
dividual sums  thus  thrown  together  and  added,  and  di- 
vided by  five,  must  each  of  necessity  closely  approximate  the 
truth,  assuming  your  average  result  to  represent  the  true 
average  value. 

The  following  table  shows  the  very  close  agreement  be- 
tween the  average  realty  value  of  the  four  counties  named, 
as  computed  in  accordance  with  the  Board’s  plan,  and  as 
computed  by  adding  together  the  five  separate  yearly  values 
for  each  county  and  dividing  their  sum  by  five, — the  average 
of  averages  method: 


138 


board’s  method.  average  of 

AVERAGES  METHOD 

Dodge  County $ 43,337,744  $ 44,039,764 

Dane  County 60,725,027  61,947,900 

St.  Croix  County 11,130,263  11,188,566 

Clark  County 11,786,730  11,288,473 


Four  counties  combined.  . . .$126,979,764  $128,464,703 

Mr.  Polleys:  The  foregoing  figures  clearly  show  that  the 

larger  the  district  covered  by  the  computation  is  made,  the 
more  closely  does  the  average  value  for  the  five  year  period 
arrived  at  by  adding  together  the  five  yearly  values,  and  di- 
viding the  sum  by  five  approximate  to  the  average  result 
arrived  at  by  following  the  method  prescribed  by  the  Board, 
and  thus  tends  to  show  that  as  the  districts  computed  grow 
larger,  the  more  nearly  do  the  yearly  values  for  such  dis- 
tricts approach  the  truth,  assuming  the  truth  to  be  the  aver- 
age value  that  the  Board  has  figured  out. 

Mr.  Curtis:  Isn’t  it  always  true  that  in  dealing  with 

averages  the  larger  the  amount  of  data  you  take  the  less 
erratic  the  results  you  get  from  any  incorrect  data  used  as 
one  of  the  factors? 

Mr.  Polleys:  Of  course,  that  is  the  simple  proposition 

I am  working  on  right  along. 

Te  recapitulate  the  four  facts  I wished  to  call  your  atten- 
tion to,  as  seeming,  to  my  mind,  to  be  of  great  force  in 
proving  that  the  yearly  values  I got  for  the  different  counties 
are  substantially  correct,  if  you  assume  that  your  average 
values  for  the  5 years’  period  are  correct:  (1)  It  is  a 

fact  that  the  value  at  the  end  of  the  period  must  be  a good 
deal  more  than  your  average  value,  because  the  prices  have 
risen;  (2)  the  yearly  values  progress  substantially  in  con- 


139 


formity  with  the  rise  of  prices;  (3)  the  yearly  values  for  the 
center  years  of  the  period  coincide  remarkably  with  the 
average  values  of  your  period;  and  (4)  you  get  an  average 
value  of  the  period  by  adding  together  my  yearly  values  and 
dividing  by  5,  which  approximates  exceedingly  closely  the 
average  valuation  which  you  get  in  the  other  way. 

Now,  of  course,  I didn’t  have  time  to  do  the  70  counties 
of  the  state  in  the  manner  prescribed  by  the  Board;  and  so 
it  was  necessary  if  I made  any  computation  of  the  state  as 
an  entirety,  to  adopt  a shorter  cut  than  I had  yet  found. 
So  I resorted  to  what  I will  allude  to,  and  will  now  explain, 
as  the  “county  recapitulation  plan.”  Of  course,  you  remem- 
ber the  little  tables  that  are  attached  by  the  register  of 
deeds,  to  the  land  sales  reports  as  they  come  in 
from  year  to  year.  He  puts  down  the  number 
of  acres  that  are  sold  as  covered  by  that  report  in 
the  12  months  period  ending  September  1st  for  the  given 
year;  and  the  total  consideration  for  which  they  are  sold, 
and  the  total  amount  for  which  those  acres  are  assessed.  Then 
he  gives  the  lots  in  the  same  manner.  Assuming  he  has  per- 
formed his  arithmetic  correctly — which  is  a violent  assump- 
tion— you  have  the  basis  for  two  examples  in  ratio.  I did 
not  verify  those  figures.  I took  the  whole  county  in  that 
way  and  performed  140  examples  of  ratio — or  142,  if  there 
are  71  counties. 

Mr.  Curtis : You  took  his  data  for  those  arithmetical 

calculations,  and  calculated  them  over  for  him  ? 

Mr.  Polleys : He  hadn’t  figured  out  these  particular  things. 
I didn’t  check  him  on  a single  thing. 

Mr.  Haugen : Most  of  the  registers  figures  had  the  value 
per  acre,  or  lot. 


140 


Mr.  Policy s : Yes ; but  not  the  ratio  between  the  asess- 

ment  and  the  consideration.  I simply  took  those  71  re- 
capitulations, as  I found  them  attached  to  the  1903  land 
sales  reports  and  figured  out  the  ratio  in  each  county  for  the 
lands,  and  the  ratio  for  the  lots.  Of  course  it  goes  without 
saying  that  there  is  a large  additional  element  of  error  in 
the  thing,  as  I did  it;  but,  for  the  reason  that  the  large  ad- 
ditional element  of  error  is  there,  and  that  it  cancels  all  out 
again,  I lay  a good  deal  of  stress  on  the  idea  that  these 
errors  that  come  in  merely  from  the  application  of  your 
formula,  are  largely  self-compensating  when  applied  to  a 
large  district  like  the  state.  I am  not  speaking  of  the  effect 
in  the  body  of  statistics  of  the  large  number  of  things  that 
should  not  be  there. 

Now  just  briefly,  I will  finish  this  up.  You  all  know 
the  work  I must  have  gone  through  to  arrive  at  the  value 
of  Dane  County  on  your  plan  for  the  year  ending  Septem- 
ber 1,  1895 ; and  so  with  each  other  year  throughout  the 
period  ending  September  1,  1903.  But  it  was  not  much 
work,  comparatively,  to  compute  the  entire  state  on  the 
county  recapitulation  plan. 

The  following  table  shows  the  yearly  realty  values  of  the 
four  counties  specially  investigated,  (1)  as  computed  in 
accordance  with  the  method  of  the  Board  and  (2)  as  com- 
puted by  the  county  recapitulation  method: 


141 


Board’s 

Method. 

County 

Recapitulation 

Method. 

Dane  County: 

1895 

$ 51,536,743 

$ 50,462,006 

1896 

53,979,644 

55,090,348 

1897 

53,065,969 

52,188,081 

1898 

57,095,451 

55,264,820 

1899 

55,316,097 

54,843,927 

1900 

58,659,456 

58,418,735 

1901 

67,664,496 

65,426,733 

1902 

71,003,999 

69,871,534 

1903 

76,672,541 

75,946,349 

Total 

544,994,396 

537,512,533 

Dodge  County: 

1895 

40,311,197 

40,270,870 

1896 

41,272,543 

39,984,260 

1897 

39,142,112 

38,599,236 

1898 

40,630,970 

41,084,469 

1899 

42,241,308 

41,525,242 

1900 

43,231,109 

40,156,678 

1901 

46,055,087 

46,005,150 

1902 

48,040,344 

46,155,390 

1903 

52,782,201 

53,027,776 

Total 

393,706,871 

386,809,071 

Clark  County: 

1898 

7,898,479 

7,904,696 

1899 

8,093,575 

8,101,784 

1900 

10,015,618 

8,048,678 

1901 

13,772,392 

12,150,221 

1902 

16,662,300 

16,311,281 

1903 

18,931,820 

18,567,607 

Total 

75,374,184 

71,084,267 

142 


St  Croix  County: 


1898  9,881,951  9,776,608 

1899  9,430,792  11,050,798 

1900  10,926,355  10,918,090 

1901  11,307,908  11,345,566 

1902.. 14,395,825  13,990,826 

1903 16,458,508  16,757,297 


Total 72,401,339  73,839,185 


Four  counties  combined  ..$1,086,476,790  $1,069,245,056 

Upon  tbe  strength  of  the  results  shown  by  the  foregoing 
table,  I thought  I would  be  justified  in  going  on  and  figuring 
the  seventy  counties  upon  the  recapitulation  basis  for  the 
twelve  months’  period,  expiring  September  1,  1903,  as  a 
means  of  arriving  at  the  realty  value  of  the  State  of  Wis- 
consin in  1903.  I did  that,  and  excluding  Wilwaukee 
County,  which  we  have  treated  separately,  by  itself — as 
the  Board,  has  done  before  us — I found,  as  was  stated  by 
Mr.  Dudley  this  morning,  that  the  realty  value  of  the  re- 
mainder of  the  State  of  Wisconsin  was  substantially 
$1,312,000,000;  to  which  must  be  added  the  realty 
value  of  Milwaukee  County,  which  is  put  by  Mr.  Dudley  and 
the  other  gentlemen  at  $346,000,000,  making  a total  realty 
value  for  the  entire  state  of  $1,658,000,000,  which  under  any 
circumstances,  and  in  any  event,  it  seems  to  me  is  the  very 
lowest  that  it  could  possibly  be  put,  and  ought  to  be  put. 

Mr.  Dudley:  You  are  using  the  1902  assessment  roll. 

Mr.  Polleys:  Yes;  because  that  was  necessary,  in  order 

to  comply  with  the  method  of  the  Board. 

Chairman  Gilson:  By  your  computation  in  1903,  what 

was  the  value  of  Milwaukee  County  ? 


143 


Mr.  Polleys:  $252,000,000;  and  I checked  that  up  for 

the  five  years’  average,  using  the  county  recapitulation  plan ; 
and  that  is  about  what  it  has  been  for  some  years ; and  the 
Board  has  been  constantly  finding  Milwaukee  County  realty 
worth  a good  many  millions  more  than  that  for  several  years ; 
has  been  finding  its  value  about-  two  hundred  and  ninety  mill- 
ions for  the  past  three  years.  Of  course  I do  not  know  how 
great  the  elimination  may  have  been  carried  on  in  Milwau- 
kee County  by  the  Board.  Unless  there  was  very  great 
elimination  carried  on  I do  not  see  how  we  could  arrive  at 
the  Milwaukee  result,  as  found  by  the  Board  for  the  past 
three  years. 

Mr.  Crandon  : Sixteen  hundred  and  fifty  eight  millions  ? 

Mr.  Polleys:  Yes. 

Mr.  Crandon:  Ours  was  about  1,800,000,000. 

Chairman  Gilson : Still,  you  confirm  Mr.  Dudley’s  esti- 

mate ? 

Mr.  Polleys:  It  seems  to  me  it  is  decidedly  a confirma- 

tion of  his  estimate,  for  there  are  a great  many  things  in  the 
statistics  used  by  me  which  do  not  belong  there,  and  my  re- 
sult is  necessarily  too  low. 

Chairman  Gilson:  You  took  the  registers  figures  for  each 
county  for  1903,  ending  September  1st? 

Mr.  Polleys:  Yes. 

Chairman  Gilson:  You  took  the  assessment  of  1902? 

Mr.  Polleys:  Yes. 

Chairman  Gilson:  For  each  county? 

Mr.  Polleys:  Yes.  I do  not  take  the  assessment  of  1903. 
I followed  the  Board’s  method,  I think,  in  all  respects. 

Mr.  Dudley:  At  the  time  Mr.  Polleys  made  the  figures 

the  1903  assessment  roll  was  not  available. 


144 


Mr.  Haugen:  Mr.  Dudley,  if  this  preliminary  hearing 

was  held  at  the  time  required  by  law,  between  the  1st  and 
15th  of  September,  it  would  he  impossible  to  use  the  figures 
of  1903.  You  have  to  use  the  figures  of  the  preceding  year. 

Chairman  Gilson : Why  do  you  use  the  assessment  of  1903, 
instead  of  1902. 

Mr.  Dudley:  We  considered  that  we  had  to  do  merely 

with  the  1903  values  of  general  property;  and  the  assess- 
ment roll  of  1903,  was  the  only  property  we  had  to  do  with — 
the  property  on  that  roll.  We  were  trying  to  get  the  true 
value  of  that  property.  We  had  the  American  Appraisal 
Company  appraise  the  property  as  of  May  1,  1903,  com- 
paring with  the  identical  descriptions  of  1903 ; and  applied 
that  also  to  the  1903  roll.  All  our  figures  are  based  on  the 
value  of  property  as  we  supposed  it  to  be  in  1903 ; and  the 
assessment  roll  of  1903,  we  have  used  as  a basis. 

Mr.  Haugen : If  they  wTere  held  at  the  time  the  law  con- 

templates, the  assessment  roll  would  not  he  available,  and 
sales  would  not  be  available. 

Mr.  Dudley:  The  law  does  not  require  you  to  follow  this 

method,  this  register  of  deeds  method.  If  it  does  not  arrive 
at  the  proper  result,  it  ought  to  he  discarded. 

Mr.  Hausen:  We  have  considered  it  the  best  available. 

Mr.  Dudley:  You  have  heretofore;  hut  in  future  we  hope 
you  wfill  not. 

Mr.  Crandon:  We  are  about  to  leave,  some  of  us,  soon, 

and  there  were  one  or  two  inquiries  we  wanted  to  make. 
First,  I want  to  state,  that  we  are  in  shape  to  prosecute  the 
inquiries  that  we  have  been  prosecuting,  if  the  doing  of  it 
will  be  of  value,  and  we  can  get  the  results  before  you  in  time 
to  be  of  service  for  this  year. 


145 


Mr.  Baldwin : You  mean  in  other  counties. 

Mr.  Crandon:  In  other  counties,  yes.  I would  like  to 

know  what  the  Board  of  Assessments  think  in  regard  to  that; 
first,  whether  they  care  for  further  investigation  along  the 
lines  that  have  been  indicated,  that  up  to  what  time  they 
would  think  that  they  coud  avail  themselves  of  the  results 
of  such  inquiry. 

Mr.  Dudley:  I think  perhaps  we  might  as  well  state 

specifically  what  we  can  do.  About  all  the  investigation  that 
could  he  done  now  would  he  in  the  nature  of  making  tran- 
scripts of  deeds  reported  to  the  registers  of  deeds,  and  read- 
ing those  deeds  and  seeing  whether  they  ought  to  have  been 
reported  or  not. 

Mr.  Curtis:  Completing  the  w7ork  in  Ozaukee 'and  Racine 

counties  ? 

Mr.  Dudley:  No;  not  completing  that;  I thought  per- 

haps it  would  be  best  to  take  up  other  counties  and  make  a 
transcript  of  the  deeds  returned  by  the  registers  of  deeds,  and 
read  the  deed  itself,  as  was  done  in  Ozaukee  and  Racine.  In 
Milwaukee  County  we  went  beyond  that.  After  eliminat- 
ing those  transfers  which  on  the  face  of  the  deed  should  not 
have  been  returned,  then  further  inquiry  was  made  of  the 
parties  to  the  transaction.  Row  wThat  I would  suggest 
would  be  that  we  continue  the  work,  so  far  as  it  can  be  con- 
tinued at  the  county  seats  merely.  It  would  be  difficult  to 
run  all  over  the  county  and  find  parties  to  the  transaction 
and  make  inquiries. 

Mr.  Curtis:  How  many  counties  could  you  cover  in  that 

way  in  the  next  thirty  days  ? 

Mr.  Dudley : I don’t  know7. 

Mr.  Crandon : In  the  w^ay  Mr.  Dudley  suggests  ? 


146 


Mr.  Curtis:  Yes,  in  the  way  now  indicated. 

Mr.  Crandon : Mr.  Brown  said,  in  an  offhand  way,  that 

he  thought  with  such  assistance  as  he  could  command,  he 
could  do  practically  four  counties  a week.  That  would  he 
from  sixteen  to  twenty  counties  in  the  thirty  days. 

Chairman  Gilson:  I think,  Mr.  Crandon,  that  the.  Board 

had  better  take  that  matter  under  advisement  for  perhaps 
two  or  three  days,  and  determine  whether  or  not  we  would 
suggest  any  further  investigation.  You  are  aware,  of  course, 
you  are  very  sensible  of  the  fact,  that  the  time  in  which  we 
are  to  make  a preliminary  valuation  and  final  valuation  of 
the  general  property  of  the  state,  and  of  the  railroads,  is  not 
very  long. 

Mr.  Crandon : We  understand  that.  We  only  want  to 

accommodate  ourselves  to  your  convenience,  and  perform 
any  service  in  our  power.  Will  you  write  me  then  ? 

Chairman  Gilson : Of  course  you  cannot  cover  the  en- 

tire state,  and  the  most  you  can  do  would  be  to  take  up  a 
few  counties  and  perhaps  present  those  as  arguments  for  mak- 
ing the  value  of  the  real  estate  throughout  the  entire  state. 

Mr.  Polleys : Wouldn’t  it  be  well,  in  case  the  Commission 
desires  to  call  for  this  further  work,  for  them  to  select  a list 
of  counties  that  they  think  would  be  most  representative  ? 

Mr.  Curtis : The  Commission  would  be,  perhaps,  glad 

to  avail  themselves  of  that  suggestion,  if  we  feel  that  we 
will  have  time  to  consider  further  data  in  that  way. 

Chairman  Gilson  : We  would  be  very  glad  to  have  you 

continue  the  investigation  if  it  could  be  presented  to  us,  and 
we  verify  it,  if  we  thought  fit,  within  the  period  before  the 
valuation. 

Mr.  Crandon : Will  you  write  me  what  you  think  of  it  ? 


147 


Mr.  C ran  don : As  a final  word  for  to-day,  so  far  as  I am  con- 
cerned, I want  to  call  to  the  attention  of  the  Board  what  they 
know  very  well,  and  perhaps  are  thinking  about  a great  deal 
oftener  than  I am.  Still  it  is  a matter  which  I think  it  very 
well  worth  our  while  to  keep  always  in  mind:  There  are 

some  statutory,  provisions  that  have  been  referred  to  here 
to-day — I do  not  mean  by  the  Board,  but  by  ourselves — which 
would  seem  to  indicate  that  the  line  of  investigation  of  the 
general  property  of  the  state  is  necessarily  and  specifically 
limited  to  the  property  which  is  on  the  tax  roll.  In  a case 
that  was  carried  to  the  United  States  Court  of  Appeals  in 
Tennessee,  the  question  of  a statutory  regulation  which  pre- 
vented the  consideration  of  a full  examination  of  the  mat- 
ter of  values — a question  which  was  not  identical  with  but 
was  similar  to  the  one  with  which  we  have  to  deal — was  dis- 
posed of  bv  the  court  in  this  way: 

“The  constitutional  right  of  every  tax  payer  to  pay  his 
taxes  at  the  same  rate  with  every  other  tax  payer,  overrides 
any  statutory  provision,  and  the  courts  will  find  some  way 
of  giving  effect  to  that  principle.” 

If  then,  it  should  appear  that  in  the  State  of  Wisconsin 
there  are  bodies  of  property  that  are  not  on  the  tax  roll,  and 
are  therefore  not  being  considered,  but  which,  if  they  were 
on  the  tax  roll,  would  limit  the  rate  of  taxation  which  you 
will  finally  apply  to  whatever  assessment  of  railroad  prop- 
erty you  shall  think  is  fair,  would  not  the  application  of  the 
doctrine  announced  call  at  least  for  a consideration  of  prop- 
erty that  ought  to  be  assessed,  but  is  not  assessed  ? If  it  is 
the  constitutional  right  of  every  taxpayer  to  be  put  on  an 
equality  with  his  neighbor,  and  if  that  constitutional  right 
as  was  said  by  that  court,  overrides  any  statutory  enact- 
ment, then  if  Mr.  Baldwin’s  exposition  of  the  grossly  in- 
adequate assessment  which  has  been  placed  upon  the  per- 


148 


sonal  property  of  the  state,  and  his  claim  that  it  ought  to  be 
greatly  enehanced  is  true,  and  if  our  claim  that  the  real  es- 
tate ought  to  be  assessed  at  a much  higher  rate  than  had  been 
placed  upon  it,  is  correct,  and  that  unless  such  advances  in 
the  assessment  of  both  the  real  and  personal  property  are 
made,  the  rate  of  taxation  to  he  put  upon  railroad  property 
will  be  unequal  to  the  rates  of  taxation  paid  by  other  tax- 
payers in  the  state,  and  if  the  blind  following  of  some  pro- 
vision of  the  statute,  would  result  in  producing  such  an  in- 
equality, would  not  the  Board  of  Assessment  be  justified 
in  considering  that  fact,  and  giving  effect  to  the  principle 
announced  by  the  United  States  Court  in  its  final  determi- 
nation of  the  rates  of  taxation  to  be  paid  upon  railroad  prop- 
erty after  the  assessment  is  made?  I do  not  now  ask  an 
answer  to  the  question.  I state  the  proposition  and  I think 
that  I have  properly  indicated  the  law.  I know  that  equity 
would  demand  the  action  which  I suggest,  and  I hope  that 
the  matter  will  not  escape  the  consideration  of  the  gentle- 
men who,  I am  sure,  desire  to  treat  fairly  every  proposition 
that  is  before  them. 

Chairman  Gilson : What  case  is  that  ? Do  you  remember 
the  title  of  it? 

Mr.  Crandon : The  Louisville  & Nashville  Railroad 

against  the  State  of  Tennessee. 

Professor  Taylor:  In  the  89  Fed.  Reporter — or  the  88th. 

Chairman  Gilson:  It  was  first  decided  by  Judge  Clark 

at  Nashville;  and  afterwards  by  the  Court  of  Appeals  at 
Cincinnati. 

Is  there  any  other  gentlemen  here  that  wishes  to  be  heard  ? 

Hearing  adjourned. 


